Huntington Bancshares Seeing A Little Short-Term Pain For Long-Term Gains

I like the fact that Huntington Bancshares (HBAN) is willing to do what it takes to create a stronger banking franchise over the long-term, even if choices like the TCF Financial (TCF) acquisition and increased spending on IT and hiring in 2021 isn't in line with what the Street wants in the short term.

With strong customer satisfaction (at least insofar as Net Promoter Scores are an accurate representation), generally conservative credit, and good internal IT capabilities, I believe Huntington is well-positioned for the years to come.

As far as valuation goes, though, I'm a little more lukewarm. This was a "like the company, not so excited about the stock" call back in December. The shares have since outperformed the S&P 500, but have underperformed peers by around 800bp, including KeyCorp (KEY) (which I recommended), so I'm not exactly regretting the call. I do still think that investors can reasonably expect total annualized long-term returns in the high single digits - which isn't bad, but also isn't breathtaking.

 

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Huntington Bancshares Seeing A Little Short-Term Pain For Long-Term Gains