Jefferies has started covering First Horizon (FHN, Financial) with a recommendation to buy and has set a price target of $25. The firm's analysis includes a favorable outlook for 32 regional and mid-cap banks. Despite uncertainties due to tariffs, several positive elements could benefit banks, such as an expected rise in loan growth as the U.S. steers clear of a recession, an improvement in net interest margins due to a steeper yield curve, and consistent credit metrics. Additionally, banks are seen as having surplus capital that can be used strategically, and the current valuations are considered appealing. These insights are shared by the analyst in a research communication to investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for First Horizon Corp (FHN, Financial) is $22.04 with a high estimate of $25.00 and a low estimate of $20.00. The average target implies an upside of 9.86% from the current price of $20.06. More detailed estimate data can be found on the First Horizon Corp (FHN) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, First Horizon Corp's (FHN, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for First Horizon Corp (FHN, Financial) in one year is $19.50, suggesting a downside of 2.79% from the current price of $20.06. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the First Horizon Corp (FHN) Summary page.
FHN Key Business Developments
Release Date: April 16, 2025
- Adjusted EPS: $0.42 per share, a $0.01 decrease from the prior quarter.
- Pre-Provision Net Revenue Growth: $16 million increase from the fourth quarter.
- Net Interest Margin Expansion: 9 basis points increase to 3.42%.
- Expense Reduction: $20 million decrease excluding deferred compensation.
- Share Repurchases: $360 million of stock repurchased in the first quarter.
- Charge-Off Ratio: 19 basis points, consistent with 2024 performance.
- Net Interest Income: Increased by $1 million this quarter.
- Fee Income: Decreased by $5 million excluding deferred compensation.
- Provision Expense: Increased by $30 million.
- CET1 Ratio: Ended the quarter at 10.9%.
- Interest-Bearing Deposit Costs: 38 basis point reduction.
- Loan Yields: Decreased by 20 basis points from the fourth quarter.
- Net Charge-Offs: Increased by $16 million to $29 million.
- ACL to Loan Ratio: Increased by 2 basis points to 1.45%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- First Horizon Corp (FHN, Financial) achieved a 9 basis point expansion in net interest margin, driven by effective deposit pricing strategies.
- The company reported a solid pre-provision net revenue growth of $16 million from the previous quarter.
- FHN successfully repurchased $360 million of stock, reflecting strategic capital deployment.
- The credit performance remained strong with a charge-off ratio of 19 basis points, consistent with prior performance.
- The company maintained a CET1 ratio of 10.9%, indicating a strong capital position.
Negative Points
- Adjusted EPS decreased by $0.01 to $0.42 per share compared to the previous quarter.
- Fee income, excluding deferred compensation, declined by $5 million.
- Provision expense increased by $30 million due to heightened macroeconomic uncertainty.
- Non-performing loans increased slightly by 2 basis points from the fourth quarter.
- The economic environment is marked by uncertainty due to tariffs and trade policies, impacting borrower sentiment and potentially delaying investments.
