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LivestreamMenuTexas’ financial boom is accelerating and Huntington Bancshares is positioned to profit from it, according to Wells Fargo. The bank initiated the Ohio-based bank with an overweight rating and a $23 price target, implying about 28% upside from Friday’s close of $17.91. “‘Y’all Street’ is now directly relevant,” analyst Mike Mayo wrote, citing Texas’ fast population growth, an economy larger than Canada, 57 Fortune 500 headquarters and a leading share of data-center development. On top of that, many banks have moved large parts of their operations to Texas from states such as New York. Several exchanges, including the NYSE Texas and the Texas Stock Exchange, have launched as well. Huntington stands to benefit from that growth after expanding its presence in Texas and southeast U.S., Mayo said the lender was becoming a “snowbird bank,” with nearly one-third of its business in those regions. “Those markets, together with Austin, have drawn 200+ headquarter relocations over eight years,” Mayo wrote. “The franchise is more growth-oriented, though SE deposit density still needs to improve.” The shift followed two Huntington acquisitions. Last year, it completed its merger deal with Dallas-based Veritex to expand its footprint in Dallas-Fort Worth and Houston. It also entered a definitive agreement to acquire Cadence Bank , a $53 billion regional bank headquartered in Houston, Texas and Tupelo, Mississippi. Mayo noted that Huntington’s Texas push also intersects with another bullish theme for the bank: the artificial investment boom. “One positive is that Texas ranks first on new data centers, meaning that Texas for Huntington Bank amplifies the capex “echo”, according to Mayo. Huntington shares rose slightly following Mayo’s call. Year to date, the stock is up around 4%.Read More
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