Analysts have lowered their fair value estimate for First Horizon from $25.07 to $24.32 per share. They note that tempered growth expectations and ongoing uncertainty around the company's M&A strategy are key factors in the revision.

Analyst Commentary

Analyst sentiment on First Horizon remains mixed following recent quarterly results and management's updated commentary on its M&A strategy. Many analysts have adjusted their ratings and price targets, reflecting evolving views on the company's future direction and potential value catalysts.

• Several bullish analysts believe First Horizon's lower valuation provides an attractive opportunity for investors, especially after the recent selloff.
• Some view the company as a likely acquisition target and maintain that selling the business could deliver better shareholder value than pursuing acquisitions for growth.
• The reaffirmation of full-year guidance and expectations for improved risk-reward, amid a potentially favorable rate environment, are seen as positives for long-term prospects.
• There is continued confidence in the bank's franchise quality, with potential for operating leverage and revenue growth as the company deepens client relationships.

• Some cautious analysts argue that much of the potential M&A premium has already dissipated, and that full de-risking of the stock is still to come.
• Recent management comments regarding possible acquisitions as a buyer have shifted sentiment, raising concerns about execution risk and near-term growth distractions.
• The likelihood of a sale of the company in the next year is now seen as lower, which limits near-term upside catalysts for the stock price.
• Questions remain about whether organic growth alone can drive revenues and profitability, especially as the company trades at a premium to regional peers.

What's in the News

• First Horizon completed a significant share repurchase by buying back a total of 32,980,711 shares, or 6.33% of outstanding shares, for $688.11 million under its buyback program announced on October 29, 2024 (Key Developments).
• The company reported net charge-offs of $26 million for the third quarter ending September 30, 2025, up from $24 million a year earlier (Key Developments).
• Full-year 2025 revenue guidance was maintained, with the company projecting revenues to be flat or increase by up to 4% (Key Developments).
• First Horizon announced plans to relocate to a new, modern office space on East Boulevard in Charlotte’s South End, consolidating two current offices. The new facility will feature 250 workspaces and numerous amenities, with the move planned for the first half of 2026 (Key Developments).

Valuation Changes

• Fair Value Estimate: Lowered from $25.07 to $24.32 per share, reflecting a minor decrease.
• Discount Rate: Increased slightly from 6.88% to 7.01%, which indicates a modestly higher perceived risk.
• Revenue Growth: Reduced from 6.61% to 5.54%. This shows a notable decrease in expected top-line expansion.
• Net Profit Margin: Improved from 26.70% to 27.44%. This suggests enhanced profitability assumptions.
• Future P/E Ratio: Declined from 13.68x to 12.15x, which signals a lower anticipated valuation multiple for forward earnings.