First Horizon’s slightly higher analyst price target reflects improved earnings forecasts driven by lower expenses, an improving regulatory environment, and expectations for stabilized loan growth, partially offset by lingering macroeconomic uncertainties, resulting in a fair value increase from $24.64 to $24.77.
Analyst Commentary
- Q2 earnings beat expectations, driven by lower expenses and provisions, leading to raised earnings forecasts for 2025 and 2026.
- Bullish analysts anticipate higher loan growth, with forecasts reflecting a stabilizing or improving lending environment.
- The regulatory landscape is seen as improving, with deregulation trends boosting sector outlook and valuations.
- Valuation of regional and mid-cap banks, including First Horizon, is believed to underappreciate the strengthening operating and regulatory backdrop.
- While upward earnings bias persists, some uncertainty remains around macroeconomic risks (trade policy, consumer health, credit costs), providing a basis for the bear case according to less optimistic analysts.
What's in the News
- First Horizon announced consolidation of two Charlotte offices into a new South End location at 110 East, occupying the top three floors with 250 workspaces and modern amenities.
- Completed a buyback of 24,436,000 shares (4.65%) totaling $498.11 million, including 512,000 shares repurchased for $9.24 million in Q2 2025.
- Net charge-offs increased by $5 million to $34 million in Q2 2025.
- Reaffirmed full-year 2025 earnings guidance, targeting PPNR growth and maintaining current revenue range, performing at the upper end.
- Announced redemption of all outstanding Series B Preferred Stock and depositary shares at $25.00 per share on August 1, 2025; no accrued dividends included as the date aligns with a dividend payment.
Valuation Changes
Summary of Valuation Changes for First Horizon
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $24.64 to $24.77.
- The Consensus Revenue Growth forecasts for First Horizon remained effectively unchanged, moving only marginally from 6.7% per annum to 6.6% per annum.
- The Net Profit Margin for First Horizon remained effectively unchanged, moving only marginally from 25.75% to 26.16%.
Disclaimer
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