Valuation Scorecard: Stock Rating A-Highest (3/15/24)-Hancock Whitney Corp (HWC).

As reflected at the current price of $43, what future Hancock Whitney operating performance is the market anticipating? To achieve average annual stock market performance of 9.0% over the next 6 years, Hancock Whitney shares will need to reach $73. Upper quartile performance will require a $86 Hancock Whitney stock price by 2029.

Executive Summary

• Price Target Research identifies Hancock Whitney as having: high profitability, above average financial strength, below average expected growth, and low stability. Risk Profile is a big positive influence on Hancock Whitney’s valuation while Growth is a big negative influence.
• Low valuation, average shareholder returns. Current valuation levels are below average relative to the Hancock Whitney Peer Group. Recent market returns have tracked the Hancock Whitney Peer Group. Total shareholder returns expected to significantly beat the overall equity market. Based on current investor expectations, Hancock Whitney shares should reach a level of $134 by 2029 — an 22.8% per year total shareholder return. A 2029 stock price of $73 would reflect median performance and a price of $86 would be required to reach upper quartile performance.
• Hancock Whitney’s historical growth is slightly below average. Historical growth has been below average relative to the Hancock Whitney Peer Group and forecasted growth is relatively below average. EPS Growth, Asset Growth, and Revenue Growth have lagged. These factors have negatively affected market perceptions of Hancock Whitney. Hancock Whitney’s historical income statement growth and balance sheet growth have diverged. Revenue growth has exceeded asset growth; earnings growth has fallen short of equity growth driving erosion in return on equity.
• Profitability is only average. The company has very high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
• Risk Profile has been Hancock Whitney’s biggest valuation strength. Hancock Whitney’s risk profile is favorable. Overall variability has been relatively low with relatively low revenue variability, very high E.P.S. variability, and very high stock price volatility. Financial Strength is relatively high and earnings’ expectations are relatively high. The debt/capital ratio has declined very significantly.

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