Huntington Bancshares' (HBAN) earnings are likely to remain pressured through 2027 amid uncertainty around the company's net interest income path, BofA Securities said Monday.
Last week, the lender reported second-quarter net interest income, or NII, of $2.05 billion, falling short of a FactSet-polled consensus of $2.1 billion. The company expects 2026 NII between 39% and 43% and 2027 earnings in a range of $1.90 to $1.93 a share.
"While EPS visibility should improve, we are less certain that (Wall) Street gains conviction in the (2027) outlook given the pressure on (NII), underscored by the (roughly) 2% (second-quarter) NII miss and management now guiding (2026) NII to potentially land 'modestly below' the low end of its (39%-to-43%) range," BofA analyst Ebrahim Poonawala said in a note to clients Monday.
The brokerage downgraded its rating on the Huntington stock to neutral from buy and reduced its price objective to $18.50 from $20.
BofA also lowered the company's EPS estimate to $1.58 from $1.60 for 2026 and to $1.85 from $1.90 for next year.
Huntington shares were down 1.2% in Monday late-afternoon trade.
The company is "clearly not immune" to the NII pressures that its competitors are facing, BofA said.
"That said, with NII potentially tracking below the low end of the (2026) guide, we would have expected management to reset the bar, giving itself some margin for error," Poonawala wrote. "We could get constructive again on evidence that management's NII and (2027) EPS guidance are achievable -- or on a reset lower that removes the risk of a negative guidance revision."
Price: $17.16, Change: $-0.20, Percent Change: -1.15%