Tuesday, FBR Capital Markets upgraded Huntington Bancshares Inc. (HBAN) shares to Outperform from Market Perform and increased its price target to $5 from $4. The brokerage adjusted its 2009 core loss per share estimate to $1.10, and its 2010 loss estimate to $0.45.
Analyst David Rochester said that his more favorable outlook is primarily driven by his new proprietary risk-adjusted valuation model, which he uses as a tool to evaluate opportunities for achieving relative outperformance in the bank space.
While the analyst continues to believe credit costs will pressure profitability through the end of fiscal 2010, possibly driving some downside surprises in earnings over the next two quarters, he believes that stock returns over the next three years could prove substantial as profitability returns and earnings converge to more "normalized" levels in the $0.55-$0.75 range.
The analyst believes the company has materially mitigated any capital concerns with its recent common equity raises, which should improve sell-side and investor views on the stock over time. Ultimately, the analyst believes HBAN has likely raised enough capital for an adverse economic scenario, and he expects the company to return to profitability in fiscal 2011, which improves his one-year forward outlook on the stock.
The analyst believes HBAN has the capital, strategy, and the management team in place to drive ROTEs to near 14% beyond the credit cycle, the expectation of which will ultimately drive longer-term outperformance.
Currently, HBAN is up $0.25 or 5.95% and trading at $4.45.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.