On Wednesday, Truist Securities adjusted its outlook on Hancock Whitney (NASDAQ:HWC), reducing the shares price target to $46 from the previous $50, while keeping a Hold rating on the stock. The adjustment follows the company's first-quarter earnings, which surpassed core earnings per share (EPS) expectations.
The securities firm acknowledged the slight improvement in Hancock Whitney's 2024 and 2025 EPS forecasts, attributing this to better fee income, marginally lower near-term net charge-offs (NCOs), and share repurchase activities. Despite the positive earnings result, the analyst expressed caution about the bank's future performance, particularly noting the potential for limited growth.
Hancock Whitney's unchanged guidance for 2024 was anticipated, but Truist Securities has expressed concerns over potential risks. These risks include the possibility of slower loan growth in the second half of 2024 and increasing deposit costs if Federal Reserve rate cuts are delayed until 2025. Truist Securities has incorporated this assumption into their analysis.
The report suggests that while the recent financial results have been solid, the bank's progress in the upcoming quarters could be hampered by these factors. As such, the revised price target reflects a more conservative valuation of Hancock Whitney's stock in light of the anticipated challenges.
InvestingPro Insights
As investors consider Truist Securities' revised outlook on Hancock Whitney (NASDAQ:HWC), the latest data from InvestingPro provides a deeper financial perspective on the company. With a market capitalization of approximately $3.63 billion and a P/E ratio that stands at a competitive 9.3, Hancock Whitney displays a valuation that could attract investors looking for potentially undervalued opportunities. Additionally, the company's commitment to shareholder returns is evident through its impressive track record of maintaining dividend payments for 37 consecutive years, a testament to its financial stability and investor-friendly approach. The dividend yield currently stands at 2.7%, coupled with a recent dividend growth of 11.11%.
However, investors should also be aware of the challenges that Hancock Whitney faces. The company's gross profit margins have been identified as weak, and three analysts have recently revised their earnings expectations downwards for the upcoming period. Despite these concerns, analysts predict the company will remain profitable this year, a sentiment supported by its performance over the last twelve months, where it continued to generate profits.
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