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Huntington (HBAN) Up 10.9% YTD: What’s Driving the Stock?


Of late, the finance sector has been putting up an impressive performance, with some monthly volatility. The United States’ economic health, on which this sector is largely dependent, has been displaying steady improvement with increasing real GDP numbers, declining unemployment rate, improving consumer spending and stabilizing housing market.

A stronger-than-expected U.S. payroll data released last week has raised expectations for the Fed interest rate hike in September — the third this year. Additionally, the Fed predicted that economic growth is likely to remain robust in the near term, while at the same time warned that trade tensions could jeopardize the uptrend.

Riding on higher rates and improved lending margins, along with lesser regulations under the Trump administration, the finance sector has emerged triumphant. Therefore, the financial stocks have performed decently to record positive gains, year to date.

One such stock is Huntington Bancshares Incorporated HBAN, which has rallied 10.9% year to date, against the industry’s growth of 12.5%.

Furthermore, with the improving macroeconomic environment and the company’s accomplishment of its core strategies, total revenues for full-year 2018 are projected to be up 5-6% for Huntington. Moreover, the company’s strategic initiatives, including expansion moves, are anticipated to bolster revenue growth.

Additionally, estimates for this Zacks Rank #3 (Hold) stock have been north bound. In the last 60 days, the Zacks Consensus Estimate moved up 1.6% and 2.2% for 2018 and 2019, respectively.

Huntington’s ROE of 12.93%, compared with the industry average of 10.18%, indicates the company’s commendable position over its peers.

Huntington’s earnings have increased 8.07% annually over the last three to five years. The earnings growth momentum is anticipated to continue in the near term as well. The company’s projected EPS (earnings per share) growth (F1/F0) is 39.33% for 2018 and (F2/F1) nearly 12.74% for 2019.

Additionally, Huntington is focused on acquiring the industry's best deposit franchise. The company’s total average deposits witnessed a four-year CAGR of 14.2% in 2017. In addition, driven by strong performance in the commercial and consumer portfolio, total average loan balance recorded a four-year CAGR of 13% in 2017. The increasing trend in average deposits and loan balances continued in the first half of 2018 as well.

Stocks to Consider

Comerica Incorporated CMA has been witnessing upward estimate revisions for the past 60 days. Also, the company’s shares have gained nearly 11.9% year to date. It sports a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

M&T Bank Corporation MTB has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped around 4.4% year to date. It currently carries a Zacks Rank #2.

SunTrust Banks, Inc. STI has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has rallied more than 14% year to date. Currently, it holds a Zacks Rank of 2.

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