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Is Huntington Stock Worth Buying on 10.6% Gain in 6 Months?
HBANHuntington(HBAN) ZACKS·2025-02-26 16:35

Core Viewpoint - Huntington Bancshares, Inc. (HBAN) has shown strong stock performance, gaining 10.6% over the past six months, outperforming its industry growth of 9.5% [1]. Company Overview - HBAN has a market capitalization of 23.3billionandisfocusingongrowthstrategiesandfinancialperformancetoenhanceitsmarketposition[3].GrowthStrategiesandInitiatives−Thecompanyisimplementingamulti−facetedgrowthstrategythatincludesgeographicexpansion,strengtheningcommercialbanking,andenhancingitswealthmanagementbusiness[4].−HBANplanstoexpanditsbankingfranchiseinNorthandSouthCarolina,aimingtohireover350employeesandopenaround55retailbranchesby2030[5].−Thebankisalsoexpandingitscommercialbankingcapabilities,withafocusonmiddlemarket,SBA,andhealthcarelendingintheCarolinasandTexas[7][8].−Inwealthmanagement,HBANaimstodoubleitsbusinessinthenextfiveyearsbydeepeningcustomerrelationshipsandexpandingadvisoryservices[10].FinancialPerformance−TheFederalReserve′sratecutsareexpectedtosupportHBAN′snetinterestincome(NII),whichrecordedafour−yearCAGRof10.523.3 billion and is focusing on growth strategies and financial performance to enhance its market position [3]. Growth Strategies and Initiatives - The company is implementing a multi-faceted growth strategy that includes geographic expansion, strengthening commercial banking, and enhancing its wealth management business [4]. - HBAN plans to expand its banking franchise in North and South Carolina, aiming to hire over 350 employees and open around 55 retail branches by 2030 [5]. - The bank is also expanding its commercial banking capabilities, with a focus on middle market, SBA, and healthcare lending in the Carolinas and Texas [7][8]. - In wealth management, HBAN aims to double its business in the next five years by deepening customer relationships and expanding advisory services [10]. Financial Performance - The Federal Reserve's rate cuts are expected to support HBAN's net interest income (NII), which recorded a four-year CAGR of 10.5% from 2019 to 2024 [12][13]. - For 2025, HBAN projects NII to rise by 4-6% from 5.34 billion in 2024, driven by an increase in earning assets [14]. - As of December 31, 2024, HBAN's liquidity totaled 13.3billion,withtotaldebtof13.3 billion, with total debt of 16.6 billion, indicating a solid financial position [15]. Dividend and Valuation - HBAN currently pays a dividend of 62 cents per share, yielding 3.87%, with a payout ratio of 50% [16]. - The stock is trading at a forward price/earnings (P/E) ratio of 11.16X, which is a discount compared to the industry average of 11.36X and peers [18][21]. Sales and Earnings Estimates - Zacks Consensus Estimates project sales growth of 7.23% for the current quarter and 5.90% for the current year [24]. - However, the company faces rising non-interest expenses, which recorded a CAGR of 10.9% over the last five years, potentially impacting profitability [26].