Huntington Bancshares cut its 2026 net interest income growth guidance to about 35% from a prior 39%-43% range and lowered its 2027 EPS target to $1.75-$1.83 from $1.90-$1.93, sending the shares down 5.6%.
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Huntington cuts 2026 NII outlook to 35% as deposit costs bite
Huntington Bancshares lowered its 2026 net interest income growth target to roughly 35 percent from a prior 39 percent to 43 percent range, a revision that also pulled its 2027 earnings guidance below the analyst consensus and sent the stock down 5.6 percent.
The Columbus, Ohio-based lender now expects 2027 earnings of $1.75 to $1.83 a share, down from an April outlook of $1.90 to $1.93, according to the investor presentation furnished on a Sept. 16 Form 8-K tied to its appearance at the Barclays Global Financial Services Conference. The midpoint of $1.79 sits about $0.09 below the $1.88 consensus estimate. Implied 2026 revenue growth was trimmed to about 34 percent year over year from roughly 37 percent.
"The market was priced for a constructive margin trajectory into 2027, and management just told it to wait another year," said Erika Najarian, a bank analyst at UBS who carries a $22 price target on the shares. "Deposit costs are behaving better than feared at the largest banks and worse than hoped at the mid-caps, and Huntington sits squarely in that second bucket."
The mechanics behind the cut are a squeeze from both sides of the balance sheet. Huntington said loan growth and net interest income were held back by higher commercial real estate and residential paydowns, lower auto production, and sustained high short-term rates that lifted deposit costs. Analysts polled by FactSet had modeled 2026 net interest income of $8.24 billion, equal to about 36 percent growth, so the new 35 percent guidance lands modestly below the street. Net interest margin — the spread a bank earns between what it pays depositors and what it collects on loans — is the single line item that determines whether the rest of the guidance holds.
The revision extends beyond net interest income. Huntington guided full-year 2026 GAAP earnings to $1.52 to $1.54 a share against a $1.60 consensus, a shortfall of about $0.07 at the midpoint. The bank offset part of the disappointment on the capital return side, raising its planned 2026 share repurchase program to a range of $1.3 billion to $1.4 billion. It pays a quarterly dividend of $0.155 a share, or $0.62 annualized, for a yield near 3.7 percent, and the shares went ex-dividend Sept. 17 with payment due Oct. 1. Against the new 2027 guidance, that dividend implies a forward payout ratio of roughly 33 percent to 35 percent, below the 42 percent payout ratio the bank has run recently, leaving room to fund buybacks without straining capital.
Recent results show why the reset landed hard. Huntington reported second-quarter earnings of $0.39 a share on July 23, matching consensus and up from $0.34 a year earlier, with revenue of $2.86 billion against a $2.84 billion estimate. That was roughly 14.7 percent year-over-year EPS growth — a pace the new 2027 range does not sustain. The stock closed at $16.86 on Sept. 11 and was indicated near $16.41 in pre-market trading on Sept. 16 after the guidance cut, leaving a market capitalization of about $34.06 billion. Its trailing price-to-earnings ratio of about 12.98 times sits above the five-year median of 12.25 times, meaning the shares are still valued near their historical average multiple even after the downgrade.
Why the deposit-cost squeeze is a sector question, not just a Huntington one
The transmission chain runs from the front end of the curve to bank funding costs. Short-term rates have stayed elevated long enough that depositors have repriced toward higher-yielding alternatives, and banks that rely more heavily on retail and commercial deposits rather than wholesale funding absorb that repricing directly in net interest margin. Huntington's disclosure that CRE and residential paydowns are shrinking the loan book compounds the problem: fewer earning assets against a higher cost of funds compresses the spread from both directions.
Peers are already repositioning around the same pressure. Truist Financial agreed to sell a $5.5 billion auto loan portfolio on Sept. 15, a move that sheds lower-yielding assets and frees balance sheet capacity. Huntington flagged lower auto production as one of the drags on its own loan growth, which puts the two mid-cap lenders on the same side of the same trade. Wells Fargo still rates Huntington Overweight, arguing that earnings and capital return remain attractive relative to peers if management can navigate rising funding costs.
The last time Huntington reset guidance this sharply was in April, when it raised the 2027 EPS range to $1.90 to $1.93 on the expectation of a steeper margin recovery. That expectation has now been reversed within two quarters, which is the part of the revision that matters most for how the sector is priced. Six analysts have published price targets on the stock over the past six months with a median of $20.25, a level that assumes the margin trough arrives in 2026. UBS's $22 target and Jefferies' $19 target bracket a wide range of views on how quickly that happens.
What the next two prints have to show
The burden now falls on the third-quarter report, which has not yet been scheduled, and on the 2027 EPS bridge management will have to defend at the next investor update. Two numbers will settle the argument. The first is the sequential change in net interest margin: a flat-to-higher print would suggest deposit costs have peaked and the 35 percent NII growth figure is a floor rather than a waypoint. The second is the loan growth trajectory, where continued CRE and residential paydowns would keep earning assets shrinking regardless of what funding costs do.
Institutional positioning around the stock is already split. Millennium Management removed 21.1 million shares, an 81.2 percent reduction, in the second quarter, and Federated Hermes cut 13.0 million shares, a 99.9 percent reduction, according to 13F filings. On the other side, JPMorgan Chase added 12.9 million shares and D.E. Shaw added 11.6 million. That divergence reflects the same unresolved question the guidance revision raised: whether Huntington's margin problem is a timing issue or a structural one.
For the broader regional bank sector, the read-through is that guidance built on a 2027 margin recovery now carries more execution risk than it did in April. Banks with heavier reliance on rate-sensitive deposits and larger CRE books face the same arithmetic Huntington just disclosed. If the third-quarter margin print stabilizes, the selloff looks like a single-stock repricing. If it does not, the 2027 EPS cuts will spread.
This article is for informational purposes only and does not constitute investment advice.
[1] Huntington Shares Tumble 5.6% on 2026 NII and 2027 EPS Outlook Cut[2] HBAN falls after Huntington trims guidance at Barclays conference | Quiver Quantitative[3] Huntington Bancshares stock falls after cutting 2026–2027 earnings outlook[4] Huntington Bancshares cuts FY27 GAAP EPS guidance to $1.75-$1.83[5] Huntington Bancshares FY26 GAAP EPS guidance $1.52-$1.54 vs $1.60 est
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