NEW YORK ( TheStreet) -- Huntington Bancshares (HBAN) received an upgrade and a downgrade from bank analysts Friday following its second quarter earnings report, though both believe the shares are headed to $7--well north of their $6.09 closing price on Thursday.
Huntington reported second quarter earnings of 16 cents per share ahead on Thursday's open, beating analyst expectations. The bank also raised its quarterly dividend to four cents a share from a penny. Still, the shares closed some 3% lower on Thursday.
Guggenheim Securities analyst Jeff Davis argued analysts were "disappointed in commentary regarding a softer macro view and pressure on yields due to competition and low reinvestment rates," though he added, "neither was a surprise to us."
Davis raised Huntington to a "Buy" while leaving his price target unchanged at $7.Taking the other side of the trade was FBR Capital Markets analyst Paul Miller, who lowered his recommendation to "market perform" from "outperform," arguing "the company is having trouble growing revenues with the economy still sluggish and low interest rates weighing on its ability to grow the balance sheet at attractive risk-adjusted spreads." Miller dropped his price target to $7 from $8. Miller also cut his rating on TCF Financial (TCB) on Friday. He lowered the recommendation to "underperform" from "market perform" while cutting his price target to $12 from $14. TCB is widely seen as being the hardest hit by the Durbin amendment, which caps fees banks can charge to merchants on debit card transactions. While Miller notes TCF "put up a hard fight" against the rule, he believes it will ultimately cost the company $50-60 million per year, or nearly 9% of projected 2011 earnings. Miller has left his other ratings unchanged so far this earnings season, including an "outperform" on JPMorgan Chase (JPM) and "market perform" on Wells Fargo (WFC)and Bank of America (BAC). -- Written by Dan Freed in New York.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV