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J.J.B. Hilliard downgrades Huntington Bancshares

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J.J.B. Hilliard downgrades Huntington Bancshares

Downgrades

* J.J.B. Hilliard W.L. Lyons LLC analyst Andrew Stapp downgraded Huntington Bancshares Inc. to "neutral" from "buy," based on valuation. Meanwhile, the analyst increased his 12-month price target to $15 from $14.50.

Stapp noted that the Columbus, Ohio-based company reported a 17.6% quarter-over-quarter increase in its net interest income in the fourth quarter of 2016, as the net interest margin also expanded seven basis points. However, he lowered his expected earnings for 2017, and increased his 2018 earnings estimates, as he thinks expected tax reduction will come in 2018, rather than mid-2017.

* FIG Partners LLC analyst Christopher Marinac lowered his investment rating for Atlantic Capital Bancshares Inc. to "market-perform" from "outperform," based on the company's fourth-quarter 2016 earnings and valuation. He also reduced his price target to $18.50 from $19.50.

The analyst noted that the Atlanta-based company missed his expected EPS because of higher provision for one credit, which required a specific one-time reserve of $2.0 million. Marinac thinks this might have been a one-time event, but the company's near-term stock and profit expectations may see some adjustments, from the investors' standpoint, because of this event.

In addition, during the fourth quarter of 2016, the company reported higher growth in its expenses, while its loans declined 1.3%. Furthermore, Marinac noted that the company is trading at 183% of tangible book. Atlantic Capital's current return on assets is 0.33%, however Marinac thinks the company needs to maintain a stronger profit level, close to 0.80%, in order to keep a higher valuation.

Notable reiteration

* Sandler O'Neill & Partners LP analyst Frank Schiraldi reiterated his "buy" rating for Oak Ridge, N.J.-based Lakeland Bancorp Inc. with a price target of $21.

The analyst noted that the company reported earnings in line with the Street expectations but a penny lower than his estimate. He added that lower-than-expected provision expense, along with weaker-than-expected fee income and higher expenses drove the miss. He adjusted his earnings estimates lower given lower run rate.

He lowered his 2017 earnings estimate, but in light of the recent capital raise, the analyst thinks the company will be able to support 5% earnings growth in 2017.

On the topic of capital raise, the analyst noted: "Given [Lakeland Bancorp]'s track record and stronger currency we think there is still good probability that the company can put this capital to work through an accretive M&A transaction over the next 12 months."