Updated from 11:54 a.m ET with afternoon market action and Huntington's interest rate shock analysis showing benefits of rising rates.
NEW YORK ( TheStreet) -- Huntington Bancshares (HBAN - Get Report) is an excellent play for investors looking for a bank stock that will benefit when short-term rise, according to Bank of America Merrill Lynch analyst Erika Penala.
In a report on Thursday, Penala wrote that in light of the recent spike in market rates for 10-year U.S Treasury bonds, her research team updated its proprietary rate scorecard for banks. The analysts found that the regional banking names covered by their firm that would see the greatest earnings benefit from an increase in short-term rates included Zions Bancorporation (ZION - Get Report), Comerica (CMA - Get Report), KeyCorp (KEY - Get Report), Huntington and Fifth Third Bancorp (FITB - Get Report).
Penala has neutral ratings on all the above names, except for Huntington Bancshares of Columbus, Ohio, which she rates a "buy," because the stock's valuation is "still reasonable," amid a strong rally for bank stocks. Her price target for the shares is of $8.00.
|Huntington CEO Stephen Steinour|
While including Huntington as the only buy-rated name among covered regional banks best-positioned for rising short-term rates Penala also said that Huntington was among two regional banks "best positioned to defend" their net interest margins, also including Capital Bank Financial (CBF) of Coral Gables, Fla., which she also rates a "buy," with a price target of $23.00.