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Piper Jaffray analyst says 'storm has passed' at Huntington

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Banking Essentials Newsletter - November Edition

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

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Piper Jaffray analyst says 'storm has passed' at Huntington

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* Piper Jaffray's Kevin Barker, writing the "storm has passed," upgraded Huntington Bancshares Inc. to "overweight" from "neutral."

After all, though investors may worry about its FirstMerit integration, auto exposure and capital levels, auto credit losses are peaking and merger-related clarity will come. And the analyst thinks Columbus, Ohio-based Huntington could "grow earnings faster than any regional bank peers" in the next two years, thanks to possible loan growth of 5% to 6% — compared with competitors' 3% to 5%.

Barker on Aug. 10 raised the stock's price target by a dollar to $15. It closed at $12.81 that day, down from the previous day's $13.17.

Notable Reiteration

* Compass Point's Charles Peabody thinks Bank of America Corp.'s push into the competitive cardscape of premium rewards is in line with a "needed effort" to regain market share by investing in core products.

But "at this point it's not clear how successful — and thus, how costly — the new travel rewards card will be." The card is competing against JPMorgan Chase & Co.'s Sapphire, American Express Co.'s Platinum and Citigroup Inc.'s Prestige.

Peabody kept the stock's rating at "sell" and the price target at $20.

Industry report

* Following a review of 18 banks and their energy portfolios, Stephens' Matt Olney on Aug. 10 noted "the energy bank peer group is still outperforming the bank index." And while some have decided to exit energy lending entirely, six of Olney's covered banks have an energy book greater than 6% of their total loans: Texas-based Cadence Bancorp., Cullen/Frost Bankers Inc. and LegacyTexas Financial Group Inc.; Oklahoma's BOK Financial Corp.; MidSouth Bancorp Inc. of Louisiana; and Mississippi's Hancock Holding Co.

And Olney released a report on deposit beta trends in Stephens' Southwest bank coverage. The group has a cycle-to-date deposit beta of 10%; LegacyTexas, fellow Texans Southside Bancshares Inc. and Green Bancorp Inc., and Arkansas-based Bank of the Ozarks all have higher than 30%. But at Cullen/Frost, International Bancshares Corp. and Triumph Bancorp Inc. of Texas and at CoBiz Financial Inc. of Colorado, deposit betas have been either flat or negative.

The analyst also tagged Arkansas-based Simmons First National Corp., Arizona-based Western Alliance Bancorp., Missouri's Enterprise Financial Services Corp, Colorado's Guaranty Bancorp, Mississippi-based First Bancshares Inc. and Texas' Independent Bank Group Inc. as banks that managed to simultaneously have comparatively better loan growth and relatively lower deposit betas.