HBAN

Middle Market M&A Activity: Capstone Partners' 2024 report indicates that middle market M&A valuations have stabilized after a decline in 2023, with average valuations dropping to 9.4x EV/EBITDA. Despite high financing costs and cautious buyers, certain sectors like healthcare and financial technology showed resilience, leading to an increase in deal sizes and a rebound in transactions closing at higher multiples.

Economic Conditions Impacting Business Owners: The ongoing high interest rate environment has pressured middle market business owners, with many facing challenges related to debt servicing. However, the Federal Reserve's recent interest rate cuts may provide some relief, and there are signs of a potential rebound in M&A activity as private equity firms seek to deploy capital amidst improving economic conditions.

Regional Bank Performance: In 2024, major US banks reported a 20% increase in net profits, with regional banks also showing strong earnings growth despite lagging behind the broader market. Approximately two-thirds of US regional banks reported higher earnings year-over-year in Q4 2024.

Huntington Bancshares Overview: Huntington Bancshares (NASDAQ:HBAN) demonstrated solid performance with a 13.5% revenue increase in Q4 2024 and a consistent dividend yield of 4.61%. The bank has implemented strategies to mitigate risks from potential interest rate hikes while maintaining regular dividend payments since 1989.

Earnings Release Announcement: Huntington Bancshares Incorporated will release its first quarter 2025 financial results on April 17, 2025, before market opening, with a conference call scheduled for 11 a.m. ET to discuss the results.

Company Overview: Huntington Bancshares is a regional bank holding company based in Columbus, Ohio, with $204 billion in assets and operates 978 branches across 12 states, offering a range of banking and financial services.

Stock Performance: Huntington Bancshares Inc's 8.50% Series A Non-Cumulative Perpetual Convertible Preferred Stock (HBANP) is up 0.4%, while the common shares (HBAN) are down 0.9% in Tuesday trading.

Dividend History: The article includes a chart detailing the historical dividend payments for HBANP, highlighting its performance over the past year.

ETF Analysis: The Dimensional US Large Cap Value ETF (DFLV) has an implied analyst target price of $35.50 per unit, indicating a potential upside of 21.46% from its current trading price of $29.23.

Stock Performance Insights: Notable underlying holdings such as Hasbro, Huntington Bancshares, and Interpublic Group show significant upside potential based on analyst targets, raising questions about the accuracy and optimism of these projections.

Analyst Ratings: Jon Arfstrom from RBC Capital maintains a Buy rating on Huntington Bancshares with a price target of $20.00, while the stock currently trades at $15.01. The analyst consensus indicates a Moderate Buy with a price target of $19.00.

Insider Activity: Recent corporate insider sentiment is negative, with an increase in insiders selling shares, including CFO Zachary Jacob Wasserman who sold 38,451 shares for over $552,000.

Quarterly Dividend Announcement: Huntington Bancshares Incorporated declared a quarterly cash dividend of $356.25 per share on its 5.70% Series I Non-Cumulative Perpetual Preferred Stock, payable on June 2, 2025, to shareholders of record on May 15, 2025.

Company Overview: Huntington Bancshares is a regional bank holding company with $204 billion in assets, operating 978 branches across 12 states, providing a range of banking and financial services since its founding in 1866.

Company Overview: Huntington Bancshares Incorporated, a regional bank with a market cap of $22.4 billion, offers diverse financial services and has seen a recent decline in stock performance, though it reported strong Q4 earnings with significant profit growth.

Market Performance: Despite a 16.8% drop from its 52-week high and underperformance compared to rivals like M&T Bank Corporation, analysts maintain a "Moderate Buy" rating for HBAN, which is currently trading below the average price target of $19.03.

Consumer M&A Market Outlook: Capstone Partners' Annual Consumer M&A Report indicates a rebound in consumer M&A activity in 2024, primarily driven by corporate acquisitions, with expectations for significant growth and improved valuations in 2025 due to increased consumer confidence and private equity investment.

Sector Performance Insights: The report highlights inconsistent performance among public consumer stocks, with only certain sectors like Tactical and E-Commerce outperforming the S&P 500, while indicating a potential shift from Consumer Staples to Consumer Discretionary as market conditions improve.

Consumer M&A Market Outlook: Capstone Partners' Annual Consumer M&A Report indicates a rebound in consumer M&A activity in 2024, with corporations driving approximately 70% of transactions, suggesting a positive outlook for 2025 as private equity is expected to deploy significant capital.

Market Performance Indicators: Despite inconsistent performance among public consumer stocks, key economic indicators such as moderating inflation and rising consumer confidence may lead to increased M&A activity and valuations in the Consumer industry in 2025.

Huntington Bancshares Analysis: Huntington Bancshares Inc (HBAN) received a high rating of 91% using the P/E/Growth Investor model based on Peter Lynch's strategy, indicating strong interest due to its reasonable pricing relative to earnings growth and solid balance sheet.

About Peter Lynch: Peter Lynch is renowned for his successful management of Fidelity Investment's Magellan Fund, achieving an average annual return of 29.2% from 1977 to 1990, and is known for making investing accessible through his book "One Up on Wall Street."

Promotion Announcement: Crista Gilmore has been promoted to Managing Director at Capstone Partners, recognizing her expertise and contributions in the Building Products & Construction Services Group since joining the firm in 2017.

Professional Background: With over 15 years of experience in mergers & acquisitions, public accounting, and corporate finance, Gilmore has successfully advised clients in the construction industry and was named an Emerging Leader by The M&A Advisor in 2021.

M&A Activity Overview: Capstone Partners' Annual Industrials M&A Report highlights a complex macroeconomic environment in 2024, with a slight GDP growth slowdown and significant impacts from supply chain disruptions, particularly due to midyear port strikes. Private equity firms remained active in the M&A market, but valuation gaps and geopolitical uncertainties influenced deal-making.

Sector Performance Insights: The report indicates a decline in average M&A valuations to 9.0x EV/EBITDA, with sectors like Engineered Products and HVAC performing well, while cyclical segments such as Environmental Health & Safety and commodity-based manufacturing faced challenges. The outlook for 2025 suggests continued interest in high-demand sectors.

Upcoming Ex-Dividend Dates: Huntington Bancshares Inc, IDT Corp, and AAON, Inc. will trade ex-dividend on 3/18/25, with respective dividends of $0.155, $0.06, and $0.10 scheduled for payment in early April and late March.

Market Impact and Historical Yields: The expected price drops for these stocks post-ex-dividend are approximately 1.09% for HBAN and 0.13% for both IDT and AAON, while estimated annualized yields are projected at 4.34%, 0.50%, and 0.51% respectively.

Morgan Stanley's Price Target Adjustment: Morgan Stanley has lowered its price target for Huntington Bancshares (HBAN) from $22 to $20 while maintaining an Overweight rating, citing increased uncertainty and a slower economic growth outlook affecting Midcap Banks in North America.

Sector Challenges: The firm highlights that changes in trade and tariff policies are happening more rapidly than expected, contributing to a challenging environment for the banking sector, which has led to multiple price target reductions across the industry.

Financial Sector Performance: Financial sector stocks fell due to recession fears, with universal and regional banks experiencing significant declines, while property & casualty insurance stocks showed resilience.

Market Reactions to Tariffs: President Trump's tariffs have raised concerns among investors about inflation and growth, leading to a mixed performance in various financial sub-sectors, including a notable drop in private equity and consumer finance stocks.

Market Overview: The S&P 500 closed positively, influenced by President Trump's tariff policies and significant earnings reports, while both the Nasdaq and Dow experienced declines over 1% for the week.

Analyst Upgrades and Downgrades: Notable stock movements included upgrades for Okta and Zscaler, downgrades for Southwest Airlines and Campbell's Company, and continued bullish sentiment towards Tesla despite recent sales trends.

Baird's Upgrades: Baird upgraded Bank of America and Huntington Bancorp to Outperform, while JPMorgan Chase was upgraded to Neutral, citing improved risk/reward dynamics following a selloff in bank stocks. Analyst David A. George noted that the potential for upside now outweighs downside risks.

Stock Performance Insights: Bank of America is recognized for its strong deposit franchise and low credit risk but is considered overvalued; Huntington Bancorp is expected to see significant growth due to various initiatives; however, JPMorgan Chase's premium valuation makes it less attractive for new investments.

Insider Trading Activity: Brendan A Lawlor, Executive VP and CCO of $HBAN, sold 1,467 shares for approximately $24,264, representing about 4.4% of his holdings, with no insider purchases reported in the last six months.

Institutional Investor Movements: In the latest quarter, 403 institutional investors increased their positions in $HBAN stock while 499 reduced theirs, indicating mixed sentiment among institutional holders.

Dividend Predictability: Dividend amounts are often unpredictable and fluctuate based on a company's profitability, with Huntington Bancshares Inc being a case study for assessing future dividend expectations.

Author's Opinion Disclaimer: The views expressed in the article are solely those of the author and do not necessarily represent the opinions of Nasdaq, Inc.