Huntington Bancshares stock rises on multiple upgrades

Huntington Bancshares' (HBAN) stock is rising after analysts from Bank of America and Jefferies upgraded the regional bank to a Buy rating, citing a strong growth outlook. Analysts also mention the company's increased investments in franchising and growing its auto inventory financing segment, among others.

Yahoo Finance Live co-hosts Julie Hyman and Myles Udland break down the latest development for the bank and how it could impact them moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

JULIE HYMAN: That's Huntington Bancshares rising after analysts from both Bank of America and Jefferies raised the stock to a Buy. B of A analyst Ebrahim Poonawala citing accelerating revenue growth for the upgrade and basically saying that the company has been putting more money into franchise, new industry verticals, he says, market expansion, fee businesses, also that they are growing their auto inventory financing, which I thought was interesting.

And the other thing I thought was interesting is that, you know, we keep talking about, what's going to happen if the Fed pushes back interest rate cuts? And Poonawala says this is a company that is going to benefit from that, that the company's net interest income will be a positive catalyst-- will receive a positive catalyst from that.

MYLES UDLAND: Well, and what's interesting about, you know, the regional bank trade is obviously, you had a regional bank crisis about 13 months ago. So, you know, get rid of all of it. I don't want anything to do with it. And, you know, Huntington Bancshares is basically trading back to where the stock was-- a little bit below where the stock was before you had the regional bank crisis.

But the old-school meme on regional banks is, well, if the economy's doing well, you just buy them and, you know, go to sleep. It's fine. Leveraged bet on the economy is what financials are, generally speaking, some people might say. And a regional bank, a smaller bank, is even more leveraged to that. But you know, it's interesting as Tim Murray was telling us from T. Rowe earlier in the hour, all markets care about, all investors really care about is, you know, the second derivative, the change in the rate of change.

And so you see someone come out and upgrade regional banks, to your point, and they can make do with the higher rates. Sure, it's more challenging for loans, but you can kind of get something with the money you have on hand. And so long as you are not ending up in a position where you're surprised by where rates go, if they go lower next, not higher next-- I mean, we're not really having that conversation, but maybe we will one day-- these banks can all-- everyone can kind of make do, right? You know, and whether it's a bank or any kind of corporate, you can figure it out if you know that rates won't at least go higher.

JULIE HYMAN: And if you have, as Huntington does, 10% of your loan book is fixed, but then you're going to have repricing at some point and repricing at not a significantly lower rate of your loans, then that's a good thing.

MYLES UDLAND: Yeah. And they have-- you know, we didn't even get into the CRE exposure, which is, on a relative basis, lower than some of their peers.

JULIE HYMAN: Yeah.