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Since Federal Reserve Chairman Jerome Powell spoke on the Jackson Gap symposium final month, markets have been slipping – and largely in response to his feedback. The central financial institution head made it clear in his feedback that he’ll proceed pushing rates of interest up in an effort to fight inflation, which is at present operating at 8.5% yearly. It seems that buyers are within the means of pricing in that stance, and expectations are that the Fed will institute one other 0.75% price hike later this month.
However whereas markets typically are feeling ache, buyers can nonetheless discover particular person shares which can be set to doubtlessly profit from at present’s setting of rising rates of interest – and Wall Road’s inventory execs are already selecting out these potential winners.
Utilizing TipRanks’ database, we pinpointed two such shares. These are Robust Purchase tickers, in response to the analyst neighborhood, and each provide double-digit upside potential. Let’s discover out simply what about them has caught the analysts’ consideration.
Hancock Whitney Company (HWC)
We’ll begin with a financial institution holding firm, Hancock Whitney. This agency operates financial institution branches within the Gulf Coast area, with greater than 230 areas within the states of Florida, Alabama, Mississippi, Louisiana, and Texas, and its headquarters in Gulfport, Mississippi. The financial institution affords the standard full vary of retail, small enterprise, and business providers, together with financial savings and checking accounts, mortgages, enterprise loans, private credit score, on-line and cellular banking, retirement advising, insurance coverage, and wealth administration. In an attention-grabbing facet observe, the agency is the official financial institution of the New Orleans Saints professional soccer workforce.
In its newest quarterly assertion, for 2Q22, whole revenues reached $331.4 million, in-line with Road expectations. Pre-provision web income – the sum of web curiosity revenue and non-interest revenue minus bills (san loss provisions) – was up $12.4 million, or 9%, year-over-year, to achieve $146.9 million. The corporate’s revenue, of $121.4 million, was down barely (1.7%) from the $123.5 million reported in 2Q21. Diluted EPS was listed as $1.38, in comparison with $1.40 within the year-ago quarter. On the identical time that earnings got here in barely decrease y/y, it additionally simply edged in greater than the $1.35 EPS forecast.
Like many banking corporations, Hancock pays out a modest dividend. The corporate’s present fee, declared in July for fee this month, was for 27 cents per widespread share. At this price, the dividend annualizes to $1.08 and yields a slightly-above-average 2.3%. The important thing level right here is reliability – Hancock Whitney has paid out a dividend in each fiscal quarter since 1967.
In protecting this inventory for D.A. Davidson, analyst Kevin Fitzsimmons factors out simply how Hancock Whitney stands to realize as charges go up: “HWC stays an asset delicate beneficiary of upper charges and a capability to lag on deposit pricing, and we view the financial institution as well-positioned for extra NIM (web curiosity margin) enlargement in 2H22… We get the sense that 2H22 NIM will more and more profit from greater charges, whereas the remaining extra liquidity will probably get utilized by YE22. Whereas HWC stays fairly asset delicate, we get the sense the financial institution is taking a look at including money circulate hedges to create a extra impartial place.”
To this finish, Fitzsimmons offers HWC shares a Purchase ranking and his worth goal, at $60, implies a one-year upside potential of ~29%. (To observe Fitzsimmons’ observe file, click here)
Total, this financial institution holding firm has picked up 4 latest Wall Road analyst opinions, and all agree: it is a inventory to Purchase, making the Robust Purchase consensus ranking unanimous. The shares are priced at $46.59 and their $58.25 common worth goal suggests an upside of 25% within the subsequent 12 months. (See HWC stock forecast on TipRanks)
Payoneer (PAYO)
From banking we’ll regulate barely – to fintech, and take a look at Payoneer. This firm has been within the enterprise of on-line worldwide cash transfers and digital fee providers since 2005, and now affords providers in over 35 languages by means of 24 world workplaces to greater than 5 million clients worldwide. Payoneer went public by means of a SPAC transaction in June of final 12 months.
In its most up-to-date quarterly report, it’s fifth as a public firm, for 2Q22, Payoneer reported whole revenues of $148.2 million, a year-over-year achieve of 34%. Internet revenue for Payoneer dropped sequentially in Q2, from Q1’s $20.2 million to the present report’s $4.4 million. Per share, this meant a drop from 6-cent EPS to 1-cent EPS. On the identical time, the determine beat Road expectations for EPS of $-0.06. The corporate has reported two worthwhile quarters in a row, versus the online losses of the earlier three quarters. As well as, the corporate has properly over $5 billion in buyer funds on deposit, and money property of $492 million.
Commenting on the influence of rising charges on Payoneer, Northland 5-star analyst Michael Grondahl says, “Payoneer’s clients maintained $5.1B+ of balances on the Payoneer platform and as rates of interest rise this will drive greater curiosity revenue.”
Attending to the nitty-gritty, Grondahl goes on to say: “Payoneer had a powerful 2Q with new buyer acquisitions, good partnerships, a brand new buyer payback interval of lower than 12 months, and elevated adoption of upper worth providers together with B2B AP/AR in lots of excessive progress markets together with 50% y/y for each quantity and income progress in Latin America, Southeast Asia, the Center East, and North Africa.”
Unsurprisingly, Grondahl charges Payoneer shares an Outperform (i.e. Purchase) and his $10 worth goal signifies potential for ~59% upside this coming 12 months. (To observe Grondahl’s observe file, click here)
Total, all 5 of the newest analyst opinions on this inventory are optimistic, giving PAYO its coveted Robust Purchase consensus ranking. The shares have a mean worth goal of $9.13 and a buying and selling worth of $6.29, suggesting an upside of ~45% over the following 12 months. (See PAYO stock forecast on TipRanks)
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Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is extremely necessary to do your personal evaluation earlier than making any funding.