CADE: All-Stock Deal Will Proceed Toward 2026 Close Amid Mixed Rating Shifts

Analysts have modestly revised their price targets for Cadence Bank, with estimates now clustered near the mid to high $40 range. This reflects the announced all stock sale to Huntington Bancshares and expectations for strategic alignment and regional expansion benefits.

Analyst Commentary

Analyst reaction to the announced all stock sale has been mixed, with views diverging on near term valuation upside versus execution and integration risks as Cadence transitions into Huntington Bancshares.

Bullish Takeaways

• Bullish analysts highlight that refreshed price targets in the mid to upper $40 range imply limited downside from current trading levels and a clearer valuation anchor tied to the agreed exchange ratio.
• Supportive commentary points to the combination as strategically sensible, citing Huntington's expanding Texas and Southeast footprint as a platform for incremental growth and cross selling opportunities.
• Some see the deal providing Cadence shareholders with exposure to a larger, more diversified regional franchise, which could warrant a higher long term earnings multiple if cost and revenue synergies are delivered.
• Analysts in this camp view the alignment of Cadence's rating and target with Huntington as a sign that near term deal risk is largely reflected, shifting the focus toward pro forma earnings accretion and capital return potential.

Bearish Takeaways

• Bearish analysts have moved to more neutral stances, arguing that the bulk of the takeover premium is now realized, limiting further upside ahead of the transaction close.
• Caution centers on the long timeline to expected closing in early 2026, which introduces regulatory, macroeconomic, and execution uncertainty that could affect both earnings delivery and valuation multiples.
• Some view the shift to Equal Weight ratings as a signal that risk or reward is now more balanced, with less conviction around Cadence outperforming regional peers on a standalone or combined basis during the integration period.
• There is also concern that integration complexity across overlapping markets in the Southeast could dilute near term operating efficiency gains, putting pressure on the pace at which anticipated synergies are realized.

What's in the News

• Huntington Bancshares agreed to acquire Cadence Bank in an all stock transaction valued at approximately $7.4 billion to $7.6 billion, marking a major expansion of Huntington's regional banking footprint (The Wall Street Journal, M&A announcement).
• Under the merger terms, Cadence shareholders will receive 2.475 shares of Huntington common stock for each Cadence share, resulting in a pro forma ownership split of about 77% Huntington shareholders and 23% Cadence shareholders (M&A announcement).
• The combined company plans to keep Cadence's broad branch network with no closures, with Cadence CEO Dan Rollins and two additional Cadence directors joining Huntington's board as part of the integration plan (M&A announcement).
• The transaction, unanimously approved by both boards, is expected to close in the first quarter of 2026, with full brand conversion to Huntington anticipated in the second quarter of 2026 and expected to be roughly 10% accretive to Huntington's earnings per share (M&A announcement).
• Cadence has scheduled a special or extraordinary shareholders meeting for January 6, 2026, a key milestone for securing shareholder approval of the merger (Special/Extraordinary Shareholders Meeting).

Valuation Changes

• Fair Value Estimate: Unchanged at $42.70 per share, indicating no revision to the intrinsic value assessment following the announced transaction.
• Discount Rate: Edged down slightly from 6.956% to 6.956%, a negligible move that does not materially affect the valuation model.
• Revenue Growth: Essentially unchanged, moving fractionally from 11.414972% to 11.414972% on a forward basis.
• Net Profit Margin: Stable at approximately 31.88%, with only de minimis model rounding changes.
• Future P/E: Steady at about 12.81x, reflecting no meaningful shift in the market's implied earnings multiple.