The firm cited strong loan growth and an inexpensive relative valuation following the banking company's second quarter results for the change in rating.
The stock closed at $9.74 yesterday.
Separately, TheStreet Ratings team rates HUNTINGTON BANCSHARES as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUNTINGTON BANCSHARES (HBAN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for HUNTINGTON BANCSHARES is currently very high, coming in at 91.74%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.68% trails the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.1%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- HUNTINGTON BANCSHARES reported flat earnings per share in the most recent quarter. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. Despite the past stability of earnings, the consensus estimate anticipates a weakening in earnings. During the past fiscal year, HUNTINGTON BANCSHARES's EPS of $0.72 remained unchanged from the prior years' EPS of $0.72. For the next year, the market is expecting a contraction of 1.4% in earnings ($0.71 versus $0.72).
- The change in net income from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income has decreased by 2.7% when compared to the same quarter one year ago, dropping from $153.27 million to $149.14 million.
- You can view the full analysis from the report here: HBAN Ratings Report