Huntington Bancshares (HBAN): A Strategic Merger-Driven Buy in Regional Banking

Huntington Bancshares (HBAN) has emerged as a compelling investment opportunity in the regional banking sector, driven by a transformative merger with Cadence Bank and a valuation that appears undervalued relative to its peers. With regulatory approvals secured and a clear path to integration, the stock offers a unique blend of near-term catalysts and long-term growth potential. This analysis examines HBAN's valuation metrics, the strategic benefits of its merger, and the optimism from analysts post-approval, painting a compelling case for investors.

Valuation: A Discount to Fair Value and Industry Peers

HBAN's valuation metrics suggest it is trading at a discount to both its intrinsic value and industry benchmarks. As of late 2025, the stock carries a trailing P/E ratio of 12.13 and a forward P/E of 10.20 as reported by Macrotrends, while its P/E ratio of 12.9x is slightly above the peer average of 12.9x but significantly higher than the broader banking industry average of 11.8x according to market data. This discrepancy highlights HBAN's relative undervaluation compared to its peers, particularly when considering its projected growth trajectory.

The company's Price-to-Earnings Growth (PEG) ratio of 1.82 as reported by Macrotrends further underscores its appeal. While a PEG above 1 typically indicates overvaluation, the metric here reflects market skepticism about near-term growth, which may not account for the transformative impact of the Cadence Bank merger. Additionally, HBAN's current trading price of $17.35 is well below its estimated fair value of $35.78 according to valuation estimates, suggesting a substantial margin of safety for investors.

Merger Progress and Analyst Optimism Post-Approval

The merger with Cadence Bank, a $7.4 billion all-stock acquisition, has cleared its final regulatory hurdles. On December 22, 2025, the Office of the Comptroller of the Currency approved the transaction, designating The Huntington National Bank as the surviving entity. The deal is set to close on February 1, 2026, pending shareholder approvals and customary closing conditions as reported by financial sources.

Analyst sentiment has turned decisively bullish following regulatory clearance. RBC Capital raised HBAN's price target to $20 from $19 and maintained an "Outperform" rating, while Jefferies reiterated a "Buy" rating with a similar price target. Credit rating agencies have also affirmed confidence in the combined entity: S&P Global Ratings upheld Huntington's 'BBB+' long-term issuer credit rating, and Morningstar DBRS upgraded its outlook to "positive" following the merger announcement. These developments reduce perceived risk and signal strong confidence in the post-merger operational and financial resilience of the combined bank.

Strategic Benefits and Growth Catalysts

The Cadence Bank merger is a strategic inflection point for Huntington, unlocking multiple growth drivers. The combined entity will operate in 21 states, with $276 billion in assets and $220 billion in deposits, positioning it among the top 10 U.S. banks by asset size. The acquisition expands Huntington's footprint in high-growth Southern markets, particularly Texas, where it will rank among the top deposit holders in Dallas and Houston according to acquisition reports. This geographic diversification enhances resilience against regional economic fluctuations and opens new revenue streams in commercial lending, small business banking, and wealth management as detailed in acquisition analysis.

Financially, the merger is projected to deliver 10% earnings per share growth by 2027 and $365 million in pre-tax cost savings. These synergies stem from operational efficiencies, including workforce rationalization and branch network optimization as reported in financial news. The integration, expected to be completed by Q2 2026, is anticipated to drive margin expansion and operational leverage as projected by industry analysts. Analysts highlight that these cost savings, combined with Huntington's digital transformation initiatives, will further bolster profitability and shareholder returns according to financial reports.

Conclusion: A Merger-Driven Buy with Clear Catalysts

Huntington Bancshares presents a rare combination of an undervalued stock and a high-conviction growth story. Its valuation metrics suggest a significant discount to fair value, while the Cadence Bank merger provides a clear roadmap to scale, cost efficiency, and geographic diversification. With regulatory approvals in place and analyst optimism translating into upgraded price targets, HBAN is well-positioned to outperform in the regional banking sector. For investors seeking a merger-driven opportunity with tangible near-term catalysts and long-term growth potential, Huntington Bancshares offers a compelling case.