The recent Fed rate hike and the Trump effect led to an uptick in the banking stocks. Hancock Holding CompanyHBHC is one such gainer. While it is hard to get too excited about this stock given its margin pressure and regulatory restrictions, its fundamentals should not disappoint investors.
Improving revenues and streamlining efforts aided the company to surge 73.1% compared with 41.7% growth for the Zacks categorized Southeast Bank industry.
However, the company's earnings estimates have declined marginally for the current year, over the last 30 days. As a result, it carries a Zacks Rank #3 (Hold).
Looking at the fundamentals, Hancock Holding remains focused on its organic growth strategy. Further, we remain optimistic about future revenue growth, given the implementation of initiatives to enhance core revenues by making several investments. Notably, the company anticipates recording a 7.8% year-over-year rise for 2016.
Moreover, the company has been streamlining its business in an effort to reduce expenses and improve efficiency. The company is targeting further improvement in operating efficiency through additional review of office areas and branch network. Moreover, the upgradation of online banking, which is scheduled to take place by mid-2017, is expected to further lower expenses.
Nonetheless, continued pressure on margins remains a major concern for Hancock Holding. We do not expect any improvement in the near term unless there is a significant change in the prevailing interest rate environment and impressive loan growth, outside of energy.
Regulatory restrictions are additional headwinds for the company. Stricter capital norms and a proposal to increase reserves are likely to limit its flexibility in the medium term.
Stocks Worth a Look
Some better-ranked stocks in the finance space include The Goldman Sachs Group, Inc. GS , Zions Bancorporation ZION and The Charles Schwab Corporation SCHW .
Goldman has witnessed an upward earnings estimate revision of 4.3% for the current year, over the past 60 days. Its share price has risen 69.9%, over the last six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here
Zions carries a Zacks Rank #2 (Buy). It has witnessed an upward earnings estimate revision of 3.2% for the current year, over the past 60 days. Over the last six months, its share price is up 73.4%.
Schwab also carries a Zacks Rank #2. For the current year, over the past 60 days, its Zacks Consensus Estimate has been revised 1.6% upward. Its share price has increased 54.2% over the last six months.
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HANCOCK HLDG CO (HBHC): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
