Huntington Bancshares Incorporated (NASDAQ:HBAN) — This regional bank holding company has over 700 banks in Ohio, Pennsylvania, Indiana, West Virginia, Kentucky and Florida.
Standard & Poor’s opinion is a five-star “strong buy” because it has been one of the strongest-growing regional banks in the last six years. Loans held for investment rose 5.4%, and net revenues have been growing at 3.6% annually over that period. Earnings have increased every year since 2011, rising from 59 cents to an estimate in 2016 of 87 cents per share.
This year, S&P expects the bank to have above-peer loan growth and improve the quality of both its earnings and operating leverage. Their 12-month target of $11 is based on forward four quarter EPS of 93 cents and a price-to-earnings ratio of 11.8X. This multiple is justified, in their opinion, by HBAN’s above-average loan growth vs. its peers.
HBAN pays an annual dividend of 28 cents per share, providing an annualized yield of 2.8%.
The stock fell from a double top at almost $12 per share in December to under $8 in late January but double-bottomed in mid-February. It advanced to above its 200-day moving average in late May but failed to pierce the all-important bearish resistance line at that time.
In the last week, the stock has flashed several bullish technical signals that should carry it to a bull market: A Golden Cross long-term indicator was formed when the 50-day moving average crossed through the 200-day moving average; it successfully broke through its 200-day moving average; and it surpassed the bearish resistance line, all in a week. The MACD indicator turned bullish as well.
Buy HBAN at under $10.25 for a four-month trade to $12 and an estimated gain of about 17%.