Wells Fargo is betting big on Texas’s financial rise — and on Huntington Bancshares to capitalize on it. The firm initiated coverage of the Ohio-based regional bank this week with an overweight rating and a $23 price target, implying about 28% upside from Friday’s close of $17.91. Analyst Mike Mayo dubbed the phenomenon “Y’all Street,” pointing to Texas’s outsized economic growth as a reason regional banks with a strong presence there deserve a fresh look from investors who may have written off the sector.
The numbers behind the call are striking: Texas’s economy is now larger than Canada’s, the state is home to 57 Fortune 500 headquarters, and it leads the nation in data-center development. Huntington has positioned itself to ride that wave, with nearly one-third of its business now concentrated in Texas and the broader Southeast after two major acquisitions — a completed merger with Dallas-based Veritex that expanded its Dallas-Fort Worth and Houston presence, and a pending deal to acquire Cadence Bank, a $53 billion regional lender based in Houston and Tupelo, Mississippi. Mayo noted the Texas push also intersects with the AI infrastructure boom, since Texas’s lead in data-center construction could amplify capital-spending activity that flows through to Huntington’s commercial banking business through what he called a growing capex “echo.” Shares rose modestly following the call and are up around 4% year-to-date.
For investors, this is a way to play the Sunbelt migration and data-center buildout theme without buying an expensive tech stock directly. Regional bank consolidation in high-growth states has historically rewarded patient shareholders as deposit bases and commercial lending expand alongside local economies. The risk: Mayo himself flagged that Huntington’s Southeast deposit density still needs to improve, and integrating the pending Cadence acquisition won’t happen overnight or without execution risk. Investors looking for regional bank exposure with a genuine growth angle, rather than a pure rate-sensitive play, should keep Huntington on their watchlist as the Cadence deal moves toward closing.
