CADE: The All-Stock Sale Will Drive Southeast Market Expansion Through 2026

Analysts have adjusted their price targets for Cadence Bank, with the consensus moving modestly downward by $1.00 per share. Recent research cites the announced sale to Huntington Bancshares and the resulting shift in outlook as key factors in the updated valuation.

Analyst Commentary

Following the announced sale of Cadence Bank to Huntington Bancshares, analysts have offered a range of views on the potential impact of the merger. Their commentary has highlighted several factors both supporting and challenging the updated outlook for Cadence Bank.

• Bullish analysts have pointed to the merger as aligning with Huntington's long-term growth strategy, particularly in the Texas and Southeast markets. This could unlock further regional expansion opportunities.
• Upgrades in price targets reflect optimism about the strategic fit of Cadence Bank within Huntington, suggesting the new combination could drive improved operational execution.
• Support for the transaction is rooted in expectations that Cadence Bank shareholders will benefit from the merger, as it could yield synergies and enhance the overall value proposition.
• Some view the transition as strengthening Huntington's competitive positioning, especially given the expansion of its footprint in key growth geographies.

• Bearish analysts have taken a more cautious stance by moving ratings to neutral following the sale announcement. This reflects uncertainty in the near-term valuation outlook.
• There are concerns regarding execution risk as the two banks integrate, particularly with respect to delivering on promised cost savings and operational synergies.
• The all-stock nature of the deal and a closing date set for early 2026 introduce an extended timeline, which could add to volatility and investor hesitation as the integration process plays out.
• Some are wary that recent price target adjustments signal that upside may be capped in the interim, pending further clarity around the combined company's financial performance.

What's in the News

• Huntington Bancshares has agreed to acquire Cadence Bank for $7.4 billion in stock, marking a significant next step for Huntington's growth strategy (The Wall Street Journal).
• The transaction terms specify that Huntington will issue 2.475 shares of common stock for each outstanding share of Cadence. Following completion, Huntington shareholders will own 77% and Cadence shareholders will own 23% of the combined entity.
• Current Cadence Bank CEO James D. "Dan" Rollins III will join Huntington as non-executive Vice Chairman and as a board member. Two additional Cadence directors are also slated to join Huntington's board.
• The merger is expected to close in the first quarter of 2026, pending regulatory and shareholder approvals. Cadence branches are set to remain open and will be rebranded under Huntington.
• Cadence Bank has reported net charge-offs of $23.6 million for Q3 2025, representing 0.26% of average net loans and leases for the period.

Valuation Changes

• Fair Value: Unchanged at $42.70 per share. This reflects stability in baseline valuation.
• Discount Rate: Increased slightly from 6.78% to 6.96%. This indicates a modest rise in perceived risk or required return.
• Revenue Growth: Remains essentially the same at approximately 11.41%, signaling steady future growth expectations.
• Net Profit Margin: Stable at roughly 31.88%, suggesting sustained profitability levels.
• Future P/E: Increased marginally from 12.88x to 12.94x, highlighting a minor uptick in projected valuation multiples.