On Feb 27, we reiterated our Neutral recommendation on
Huntington Bancshares Inc.
) based on its rising revenues and healthy capital position.
However, pressurized net interest margin, rising expenses and
unsettling macro economic issues remain the major causes of
concern. Huntington retains a Zacks Rank #3 (Hold).
Huntington's fourth quarter 2012 earnings came in at 19 cents per
share, beating the Zacks Consensus Estimate by a couple of cents.
Total revenue, on a fully-taxable-equivalent (FTE) basis, came in
at $737.2 million, up 14% from the year-ago quarter.
Moreover, revenues surpassed the Zacks Consensus Estimate of
$702 million. Further, Huntington has delivered an average
earnings surprise of 14.6% last year.
Moreover, over the last 60 days, the Zacks Consensus Estimate for
2013 hiked only by a penny. Further, opportunistic acquisitions
as well as robust inorganic growth have helped the company
sustain the Neutral recommendation. Extensive capital deployment
activities also continue to reinforce investors' confidence in
However, the low interest rate environment and changing
regulatory landscape are expected to pressurize the net interest
margin in the subsequent quarters. Further, given the sluggish
market recovery, we expect any significant improvement in top
line - in the foreseeable future - to remain elusive.
In addition, we remain wary of the continuously rising
operating expenses. The company is trying to rein in costs and
has undertaken several measures in 2012. However, we do not
anticipate cost-trimming initiatives to fully control the rising
costs as the company continues to expand globally, which involve
numerous regulatory and legal expenses.
BANK MUTUAL CRP (BKMU): Free Stock Analysis
META FINL GRP (CASH): Get Free Report
FIRST DEFIANCE (FDEF): Free Stock Analysis
HUNTINGTON BANC (HBAN): Free Stock Analysis
To read this article on Zacks.com click here.
Other Stocks to Consider
Other banking stocks that are currently performing well include
First Defiance Financial Corp.
Bank Mutual Corp.
Meta Financial Group, Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).