On Wednesday, Stephens maintained an Equal Weight rating and a $50.00 stock price target for Hancock Whitney (NASDAQ:HWC), following the company's first-quarter earnings report. The bank's financial results surpassed consensus forecasts, propelled by robust fee income and effective cost management.
Despite no revisions to the 2024 guidance, the tone during the earnings call was notably more positive regarding future fees, operating expenses, and non-interest bearing (NIB) deposits.
Hancock Whitney's recent earnings call revealed a more optimistic outlook for the bank's fee income and expense control. The bank's deposit costs are expected to reach a peak, potentially leading to stable net interest income (NII) in the second quarter of 2024.
Moreover, with capital ratios on the rise, the forecast includes a prediction for increased capital returns through a higher cash dividend payout and further stock repurchase activities in the second half of 2024 and into 2025.
Credit trends at Hancock Whitney are showing signs of normalization, with an uptick in nonaccrual and criticized loans in comparison to last quarter. This normalization is part of the broader financial landscape the bank is navigating. Despite these credit movements, the bank's overall financial health appears to remain solid, with expectations of continued capital build-up.
The $50 stock price target set by Stephens is based on a 10 times multiple of the 2025 earnings per share (EPS) forecast of $4.97 and 1.3 times the 12-month trailing book value per share (TBVPS) forecast. This valuation reflects the firm's neutral stance on the bank's stock, indicating that the current price adequately reflects the bank's expected future performance.
In summary, Stephens' outlook for Hancock Whitney remains unchanged at an Equal Weight rating, with a steady price target of $50.00. The bank's first-quarter performance, characterized by strong fee generation and cost efficiency, coupled with a positive tone regarding future financial controls and deposit costs, suggests a stable path ahead for Hancock Whitney's financials.
InvestingPro Insights
Recent data from InvestingPro underscores the financial stability of Hancock Whitney (NASDAQ:HWC). The bank's adjusted market capitalization stands at $3.74 billion, with a trailing twelve-month price-to-earnings (P/E) ratio of 9.71, indicating a potentially undervalued stock compared to the industry average.
Despite a slight decrease in revenue growth over the last twelve months as of Q4 2023, Hancock Whitney maintains a strong operating income margin of 41.71%, reflecting efficient management and profitability.
Notably, the InvestingPro Tips highlight that Hancock Whitney has a high shareholder yield and has consistently paid dividends for 37 consecutive years, which may be particularly attractive to income-focused investors.
Still, analysts are cautious, with three having revised their earnings estimates downwards for the upcoming period, and the company's gross profit margins are considered weak. Yet, the bank is expected to remain profitable this year, a sentiment echoed in the positive tone of the recent earnings call.
For investors seeking further insights and additional tips, there are 5 more InvestingPro Tips available for Hancock Whitney. These insights could provide a deeper understanding of the bank's financial health and future prospects. Interested readers can unlock these tips with an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.