Huntington Bancshares Incorporated (NASDAQ: HBAN) lowered its 2027 earnings per share guidance to a range of $1.75 to $1.83, down from a prior projection of above $1.90, while simultaneously reducing its 2026 net interest income growth outlook from 39% to 43% to roughly 35%. The revision, announced at a Barclays conference on September 16, 2026, coincided with the Federal Reserve's first interest rate hike since 2023, triggering a 5.55% drop in the bank's stock price to $15.82. This level sits close to the company's 52-week low.
The guidance cut reflects intensifying competition for deposits and loans, which is squeezing margins as deposit costs rise and loan pricing tightens. This pressure is not unique to Huntington; Fifth Third shares fell 4.1% on the same afternoon, mirroring a broader decline across the financials sector. The Federal Reserve's rate increase creates an immediate headwind for banks, which must raise deposit yields to retain balances before asset yields fully reprice. Additionally, accelerated payoffs on commercial real estate loans have reduced total earning assets, although these early payoffs lower credit risk within the loan book.
Despite the near-term margin pressure, Huntington's fundamental scale remains substantial. The bank's loan portfolio has expanded to $189 billion from $50 billion in 2015, while deposits reached $222 billion. A significant growth driver is value-added fee income, which has compounded at a 14% annual rate since mid-2024. Year-to-date growth in this segment is near 32%, providing a buffer against spread compression that offers a competitive advantage over lenders relying solely on interest spreads.
| Metric | Value |
|---|---|
| 2027 EPS Guidance | $1.75-$1.83 |
| Previous 2027 EPS Guidance | Above $1.90 |
| 2026 NII Growth Outlook | Roughly 35% |
| Previous NII Growth Outlook | 39%-43% |
| Loan Portfolio | $189 billion |
| Deposit Base | $222 billion |
The long-term impact of a higher-for-longer rate environment depends on deposit beta, which measures how much of a benchmark rate increase is passed to depositors. A lower beta allows fee revenue to support earnings more effectively, while a higher beta sustains margin squeeze over multiple quarters. Currently trading at a 12-times multiple, Huntington appears discounted relative to its fundamentals, aided by its fee engine. Wells Fargo maintains an Overweight rating on the stock with a price target of $21, which remains roughly a third above the current price.
Insider Monkey data indicates that 56 funds held HBAN shares in the second quarter, up from 53 in the prior period, with short interest standing at a moderate 2.56% of float. Investors are advised to monitor the third-quarter print for signs of deposit beta trends and net interest margin stability.