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First Horizon (FHN)
NYSE:FHN
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First Horizon
(NYSE:FHN)
Rating:58Neutral
Price Target:―
Positive Factors
Earnings
Higher net interest margin and lower expense outlook push earnings per share estimates higher, with a raised price objective to $24.
Share Repurchase
FHN has begun utilizing excess capital for share repurchases, with significant authorization remaining on the buyback plan.
Stock Valuation
First Horizon's attractive and scarce Southeastern footprint should enhance its valuation if bank mergers and acquisitions activity increases.
Negative Factors
Credit Trends
Credit trends remained solid, but FHN increased reserves due to broader macroeconomic uncertainty.
Loan Growth
The loan growth outlook is still soft and mergers and acquisitions are not a priority.
First Horizon (FHN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.18B
Dividend Yield2.99%
Average Volume (3M)5.21M
Price to Earnings (P/E)14.0
Beta (1Y)1.29
Revenue Growth-0.38%
EPS Growth-1.30%
CountryUS
Employees7,200
SectorFinancial
Sector Strength82
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.42
Shares Outstanding507,233,430
10 Day Avg. Volume4,339,980
30 Day Avg. Volume5,211,290
Financial Highlights & Ratios
PEG Ratio2.12
Price to Book (P/B)1.14
Price to Sales (P/S)0.00
P/FCF Ratio7.99
Enterprise Value/Market Cap1.50
Enterprise Value/Revenue1.44
Enterprise Value/Gross Profit4.23
Enterprise Value/Ebitda8.98
Forecast
1Y Price Target
$21.88Price Target Upside10.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
First Horizon Business Overview & Revenue Model
Company DescriptionFirst Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through three segments: Regional Banking, Specialty Banking, and Corporate. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also underwrites bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; sells loans and derivatives; and offers advisory services. In addition, it offers various services, such as mortgage banking; title insurance and loan-closing; brokerage; correspondent banking; nationwide check clearing and remittance processing; trust, fiduciary, and agency; equipment finance; and investment and financial advisory services. Further, the company sells mutual fund and retail insurance products; and credit cards. It operates approximately 500 banking offices in 22 states under the First Horizon Bank brand; and 400 banking centers in 12 states under the FHN Financial brand in the United States. The company was formerly known as First Horizon National Corporation and changed its name to First Horizon Corporation in November 2020. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.
How the Company Makes MoneyFirst Horizon Corporation generates revenue through multiple streams, primarily from its banking operations. The company earns money through interest income on loans and leases extended to customers, including personal loans, mortgages, and commercial loans. It also collects fees from various banking services, such as account maintenance, transaction processing, and wealth management advisory services. Additionally, First Horizon participates in capital markets activities, which contribute to fee-based income from underwriting, advisory, and trading services. Significant partnerships with investment firms and other financial institutions further enhance its revenue potential by expanding its service offerings and customer reach.
First Horizon Financial Statement Overview
Summary
First Horizon exhibits a mixed financial performance with declining revenues and profitability concerns marked by zero net income in 2024. However, the company maintains a strong balance sheet with reduced leverage and stable cash flows, supporting financial stability amidst operational challenges.Income Statement
The income statement shows a declining revenue trend from $3.209B in 2022 to $1.155B in 2024. Gross profit margin remains at 100% due to the nature of banking operations. The absence of EBIT and net income for 2024 significantly impacts profitability analysis, indicating potential operational challenges.45
Neutral
Balance Sheet
The balance sheet reflects a stable equity position with stockholders' equity rising from $8.253B in 2022 to $9.111B in 2024. The debt-to-equity ratio improved from 0.50 in 2022 to 0.37 in 2024, indicating reduced leverage. Equity ratio slightly increased to approximately 11.1% in 2024, suggesting a stable financial foundation.65
Positive
Cash Flow
Operating cash flow shows resilience, maintaining around $1.268B in 2024 despite revenue declines. Free cash flow remains strong at $1.268B, but growth has stagnated. The operating cash flow to net income ratio cannot be assessed due to zero net income in 2024, highlighting a potential risk in earnings sustainability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.16B | 2.98B | 3.21B | 3.07B | 3.15B | Gross Profit |
| 1.16B | 2.98B | 3.21B | 3.07B | 3.15B | EBIT |
| 974.00M | 886.00M | 1.45B | 1.27B | 921.00M | EBITDA |
| 0.00 | 1.21B | 1.22B | 1.20B | 850.00M | Net Income Common Stockholders |
| 775.00M | 897.00M | 900.00M | 999.00M | 845.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.80B | 9.40B | 2.44B | 24.76B | 17.60B | Total Assets |
| 82.15B | 81.66B | 78.95B | 89.09B | 84.21B | Total Debt |
| 3.40B | 1.48B | 4.10B | 3.71B | 3.87B | Net Debt |
| 2.49B | -864.00M | 1.66B | -12.34B | -5.69B | Total Liabilities |
| 73.04B | 72.37B | 70.41B | 80.60B | 75.90B | Stockholders Equity |
| 8.82B | 9.00B | 8.25B | 8.20B | 8.01B |
| Cash Flow | Free Cash Flow | |||
| 1.22B | 1.26B | 2.28B | 688.00M | 114.00M | Operating Cash Flow |
| 1.27B | 1.30B | 2.31B | 741.00M | 172.00M | Investing Cash Flow |
| -1.06B | -2.60B | 8.31B | -4.62B | -4.97B | Financing Cash Flow |
| -404.00M | 1.49B | -10.87B | 4.02B | 5.18B |
First Horizon Technical Analysis
Positive
19.76
Price Trends
18.57
Positive
19.67
Negative
18.43
Positive
Market Momentum
0.52
Negative
54.02
Neutral
60.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FHN, the sentiment is Positive. The current price of 19.76 is above the 20-day moving average (MA) of 19.13, above the 50-day MA of 18.57, and above the 200-day MA of 18.43, indicating a bullish trend. The MACD of 0.52 indicates Negative momentum. The RSI at 54.02 is Neutral, neither overbought nor oversold. The STOCH value of 60.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FHN.
First Horizon Risk Analysis
First Horizon disclosed 111 risk factors in its most recent earnings report. First Horizon reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Horizon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $9.19B | 14.29 | 7.18% | 2.36% | 19.50% | 3.48% | |
78 Outperform | $9.70B | 4.91 | 9.43% | 5.28% | 10.87% | 14.59% | |
76 Outperform | $8.67B | 16.13 | 16.82% | 1.65% | -4.27% | 17.70% | |
73 Outperform | $8.86B | 11.85 | 8.59% | 3.04% | 2.60% | -9.07% | |
71 Outperform | $10.42B | 5.74 | 38.13% | 4.05% | -35.65% | 70.23% | |
64 Neutral | $12.78B | 9.87 | 7.67% | 17015.06% | 12.34% | -5.99% | |
58 Neutral | $10.18B | 14.00 | 9.09% | 2.99% | -0.38% | -1.30% |
* Financial Sector Average
Performance Comparison
FHN
First Horizon
19.76
4.61
30.43%
CBSH
Commerce Bancshares
63.23
11.77
22.87%
GGAL
Grupo Financiero Galicia SA
62.33
33.57
116.72%
WBS
Webster Financial
51.30
8.78
20.65%
WF
Woori Finance Holdings Co
39.30
7.37
23.08%
SSB
SouthState Corporation
87.92
13.39
17.97%
First Horizon Earnings Call Summary
Earnings Call Date:Apr 16, 2025
(Q1-2025)
| % Change Since: 12.53%|
Next Earnings Date:Jul 22, 2025
Earnings Call Sentiment Neutral
First Horizon demonstrated strong operational and financial management with improvements in net interest margin and effective capital deployment. However, macroeconomic uncertainties and increased provisions posed challenges, resulting in a balanced sentiment.Q1-2025 Updates
Positive Updates
Net Interest Margin Expansion
First Horizon achieved a 9 basis point increase in net interest margin, reaching 3.42%, driven by a 27 basis point decline in average total deposit costs.
Strong Capital Management
The company repurchased $360 million of stock in the first quarter, reflecting a strategic deployment of excess capital, and maintained a CET1 ratio of 10.9%.
Robust Credit Performance
Credit performance remained strong with a charge-off ratio of 19 basis points, consistent with prior performance, and an ACL to loans ratio increased to 1.45%.
Expense Reduction
First Horizon managed to reduce expenses by $20 million, excluding deferred compensation, evidencing efficient expense management.
Countercyclical Business Strength
The countercyclical businesses provided a natural revenue hedge, supporting earnings stability amidst economic fluctuations.
Negative Updates
Earnings Per Share Decline
Adjusted EPS decreased by $0.01 from the prior quarter, indicating slight pressure on earnings performance.
Provision Expense Increase
Provision expense increased by $30 million due to heightened macroeconomic uncertainty, leading to a 2 basis point increase in the ACL to loans ratio.
Fee Income Decline
Fee income, excluding deferred compensation, declined by $5 million, impacted by lower brokerage, Wealth and Trust income, and market volatility.
Loan Portfolio Contraction
Period-end loans were down 1% from the prior quarter, influenced by continued paydowns in commercial real estate.
Macroeconomic Uncertainty
The ongoing uncertainty due to tariffs and trade policies contributed to a cautious market outlook, affecting borrower sentiment and investment decisions.
Company Guidance
During the First Horizon First Quarter 2025 Earnings Call, the company provided guidance and detailed several key financial metrics. They reported an adjusted EPS of $0.42 per share, a slight decrease from the previous quarter. The pre-provision net revenue grew by $16 million, and there was a 9 basis point expansion in net interest margin to 3.42%, primarily driven by a reduction in deposit rates. Expenses were reduced by $20 million, excluding deferred compensation. The company repurchased $360 million in stock, impacting the CET1 ratio, which ended the quarter at 10.9%. Despite macroeconomic uncertainties, including potential impacts from tariffs, First Horizon maintained a strong risk-adjusted credit performance with a charge-off ratio of 19 basis points. They also increased their coverage ratio to account for potential future losses. Looking ahead, First Horizon reiterated its 2025 guidance, emphasizing discipline in deposit pricing and loan growth, while aiming for a 15% return on tangible common equity over the intermediate term.First Horizon Corporate Events
Business Operations and StrategyFinancial Disclosures
First Horizon Reports Strong Q1 2025 Financial Results
Positive
Apr 16, 2025
First Horizon Corporation reported strong financial results for the first quarter of 2025, with a net income available to common shareholders of $213 million and an earnings per share of $0.41, marking an increase from the previous quarter. The company’s business model, which emphasizes safety, profitability, and growth, has enabled it to navigate economic uncertainties and achieve sustainable growth, benefiting its stakeholders in the long term.
Spark’s Take on FHN Stock
According to Spark, TipRanks’ AI Analyst, FHN is a Neutral.
First Horizon’s stock score is driven by its mixed financial performance, strong balance sheet stability, and cautious optimism from recent earnings. While valuation metrics are favorable, neutral technical indicators and challenges such as declining revenues and increased non-performing loans weigh on the score.
To see Spark’s full report on FHN stock, click here.
Executive/Board Changes
First Horizon Director Rosa Sugrañes Announces Retirement
Neutral
Feb 14, 2025
Rosa Sugrañes has announced her retirement from the Board of First Horizon, effective at the 2025 annual meeting of shareholders. Ms. Sugrañes has been a Director since the 2020 merger with IBERIABANK Corporation and has served in various directorial roles since 2006. Her retirement does not stem from any disagreements with the company’s management.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.