Should You Buy Into Comerica (CMA) and Huntington Bancshares (HBAN) Before Earnings Reports Hit?

NASDAQ: HBAN | Huntington Bancshares Inc. News, Ratings, and Charts

HBAN – The banking industry has regained its footing after the major regional bank collapses, but it is still exposed to several risks. As banks Comerica (CMA) and Huntington Bancshares (HBAN) are set to release their fourth-quarter results this Friday, let’s determine if you should buy these stocks ahead of earnings. Read on to know more….

While the U.S. banking sector has stabilized following regional bank failures last March, the industry continues to face several headwinds, including a slowing economy, increased deposit costs, high risk in commercial real estate (CRE) lending, persistent inflation, and a surge in non-performing loans.

Bank stocks Comerica Incorporated (CMA) and Huntington Bancshares Incorporated (HBAN) are scheduled to report their fourth-quarter earnings this Friday, January 19, 2024. Ahead of earnings, investors could avoid these fundamentally weak stocks.

Banks kicked off fourth-quarter earnings season last Friday, when JPMorgan Chase (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC) reported rather disappointing results. JPM, the largest U.S. bank by assets, paid a sizeable fee associated with the government seizures linked to the regional banking crisis hit in March 2023, which impacted its earnings.

JPMorgan Chase CEO Jamie Dimon said, “The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing.” However, he added that deficit spending and supply chain adjustments “may lead inflation to be stickier and rates to be higher than markets expect.”

The U.S. banking sector has regained its footing following the failures of major regional banks, including Silicon Valley Bank, Signature Bank, and First Republic Bank, the biggest bank collapses since the 2008 financial crisis. But U.S. bank CEOs warned a slowing economy and escalating geopolitical tensions could weigh on earnings.

The U.S. economy rose at a 5.2% annualized pace in the third quarter, the product of better-than-anticipated business investment and robust government spending, the Commerce Department reported. But consumer spending witnessed a downward revision, increasing just 3.6%, down from the 4% initial estimate.

However, the Atlanta Fed’s GDPNow model estimate for real GDP growth during the fourth quarter is 2.2%, predicting a drop of more than half the third-quarter level.

Moreover, last year, banks struggled significantly with higher interest rates as they hit lenders on both sides of the ledger, increasing deposit costs and declining the value of their bond portfolio. For some regional lenders, it resulted in fatal bank runs. The Fed held interest rates steady in its December meeting and indicated three rate cuts this year.

Falling rates might help banks’ bond portfolios but also pressure income as higher deposit costs linger.

According to Manan Gosalia, an analyst at Morgan Stanley, “For the regional banks specifically, we are at a stage right now where we’re in the worst part of the cycle … We’re likely to see deposit costs rise, cost of funding rise well into 2024, so there are some challenges on the revenue side. It is likely here that loan growth will slow pretty meaningfully.”

Amid this backdrop, investors could avoid investing in bank stocks HBAN and CMA before their earnings.

Let’s discuss the fundamentals of these stocks in detail:

Huntington Bancshares Incorporated (HBAN)

HBAN operates as the bank holding company for The Huntington National Bank and offers commercial, consumer, and mortgage banking services. The company operates through four segments: Consumer and Business Banking; Commercial Banking; Vehicle Finance; and Regional Banking and The Huntington Private Client Group (RBHPCG).

HBAN’s trailing-12-month ROCE and ROTC of 14.33% and 1.26% are higher than the industry averages of 11.72% and 1.16%, respectively. However, the stock’s trailing-12-month CAPEX/Sales of 1.79% is 9.9% lower than the industry average of 1.98%.

For the third quarter that ended September 30, 2023, HBAN’s net interest income decreased 2.6% year-over-year to $1.37 billion. Its Pre-Provision Net Revenue (PPNR) declined 7% from the year-ago value to $798 million. The company’s income before taxes came in at $688 million, down 7.4% from the previous year’s quarter.

In addition, net income attributable to Huntington declined 7.9% year-over-year to $547 million, and its net income per common share was $0.35, down 10.3% from the prior year’s period. The company’s average total loans and leases decreased by $561 million from the previous quarter to $120.80 billion.

Huntington is scheduled to release its fourth quarter 2023 financial results prior to the market opening on Friday, January 19, 2024. Street expects HBAN’s revenue and EPS for the fourth quarter (ended December 31, 2023) to decrease 10.2% and 38% year-over-year to $1.76 billion and $0.27, respectively.

In addition, analysts expect HBAN’s revenue and EPS for the fiscal year 2023 to increase 1.8% and decline 9.5% year-over-year to $7.28 billion and $1.36, respectively. For the fiscal year 2024, the company’s revenue is expected to grow marginally year-over-year to $7.29 billion, but its EPS is estimated to decrease 9.9% from the previous year to $1.22.

HBAN’s stock has declined 4% over the past month and 15.5% over the past year to close the last trading session at $12.25.

HBAN’s POWR Ratings reflect its deteriorating growth outlook. The stock has an overall rating of D, equating to a Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

HBAN has a D grade for Growth, Sentiment, and Quality. In the F-rated Midwest Regional Banks industry, it is ranked #32 out of 45 stocks.

Click here to access the other ratings of HBAN for Stability, Value, and Momentum.

Comerica Incorporated (CMA)

CMA provides several financial products and services like commercial loans and lines of credit, deposits, cash management, capital market products, insurance products, foreign exchange management services, loan syndication services, and investment banking and brokerage products. It operates in Commercial Bank; Retail Bank; Wealth Management; and Finance segments.

In terms of forward non-GAAP P/E, CMA is trading at 7.23x, 29.5% lower than the industry average of 10.26x. However, the stock’s trailing-12-month Price/Book and Price/Cash Flow multiples of 1.56 and 9.83 are lower than the respective industry averages of 1.18 and 7.50.

CMA’s net interest income decreased 15% year-over-year to $601 million for the third quarter that ended September 30, 2023. Its non-interest expenses increased 10.6% from the year-ago value to $555 million. Its net income and earnings per share came in at $251 million and $1.84, down 28.5% and 26.4% year-over-year, respectively.

Furthermore, the company’s average deposits declined 10.9% from the prior year’s quarter to $65.88 billion.

Comerica Incorporated is set to report its fourth quarter 2023 earnings on January 19, 2024. Analysts expect the company’s revenue for the quarter (ended December 2023) to decline 17.6% year-over-year to $840.15 million. The consensus EPS estimate of $1.32 for the same period indicates a decline of 48.9% year-over-year.

For the fiscal year 2023, Street expects CMA’s revenue to grow 3.4% year-over-year to $3.65 billion, but the company’s EPS is estimated to decline 11.7% year-over-year to $7.48. Additionally, Comerica’s revenue and EPS for the ongoing year 2024 are expected to decrease 6% and 25.6% from the prior year to $3.43 billion and $5.57, respectively.

Shares of CMA have plunged 2.2% over the past month and 21.9% over the past year to close the last trading session at $53.25.

CMA’s bleak fundamentals are reflected in its POWR Ratings. The stock has an overall D rating, translating to a Sell in our proprietary rating system.

The stock has an F grade for Growth and a D for Quality, Sentiment, and Stability. CMA is ranked #7 of 10 stocks in the F-rated Money Center Banks industry.

In addition to the POWR Ratings I’ve just highlighted, you can see CMA’s ratings for Value and Momentum here.

What To Do Next?

Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:

10 Stocks to SELL NOW! >


HBAN shares were unchanged in premarket trading Wednesday. Year-to-date, HBAN has declined -3.69%, versus a -0.08% rise in the benchmark S&P 500 index during the same period.


About the Author: Mangeet Kaur Bouns


Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HBANGet RatingGet RatingGet Rating
CMAGet RatingGet RatingGet Rating
JPMGet RatingGet RatingGet Rating
CGet RatingGet RatingGet Rating
BACGet RatingGet RatingGet Rating
WFCGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Bullish or Bearish Stock Set Up?

The S&P 500 (SPY) record highs sounds pretty darn bullish on the surface. Yet as we dig below the surface there are some curious signals that point more Risk Off. This is especially true as we come into the next Fed meeting after a round of data that points to inflation still being too high...only further delaying the first rate cut. What does this all mean for stocks from here? Steve Reitmeister offers his latest views on the market outlook along with a preview of his top picks to stay on step ahead of the market. Read on for more...

Unveiling Adobe (ADBE) Q2 Earnings: What Lies Ahead for Investors?

Software giant Adobe Inc. (ADBE) has released its second-quarter earnings, revealing double-digit growth in both revenue and profits. Yet, concerns arise around the complexities of navigating growth in the face of advancing AI technologies. Let’s analyze ADBE’s recent performance and assess key fundamentals to uncover what lies ahead for investors…

3 AI Stocks to Invest in for the Next Technological Revolution

The AI market is experiencing a significant growth trajectory, driven by widespread application across various industries. Hence, it could be wise to invest in top AI stocks, Alphabet (GOOGL), Meta Platforms (META), and Alibaba Group Holding (BABA) for the next technological revolution. Read more...

Analyzing Broadcom’s (AVGO) Q2 Earnings: Worth Investing?

Driven by a surge in demand for its AI products, Broadcom (AVGO) reported robust earnings in its latest quarterly results, exceeding expectations on both top and bottom lines. However, is the stock’s recent announcement of a 10-for-1 stock split worth investing in? Keep reading to find out…

Stock Alert: Breakout or Fake Out?

The S&P 500 (SPY) officially made new highs this week. Perhaps a reason to celebrate more gains on the way...or perhaps there are signs this move is hollow leading to more downside soon on the way. To help solve this riddle, 44 year investment veteran Steve Reitmeister shares his views along with a trading plan and top picks to stay on the right side of the action. That is what Steve Reitmeister will cover in his latest commentary below. Read on for more...

Read More Stories

More Huntington Bancshares Inc. (HBAN) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All HBAN News