The most recent earnings announcement First Horizon National Corporation’s (NYSE:FHN) released in December 2018 revealed that the business gained from a substantial tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key growth figures on how market analysts perceive First Horizon National’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for the coming year seems pessimistic, with earnings reducing by a double-digit -12%. Over the medium term, earnings will begin to improve, climbing year on year, and arriving at US$504m by 2022.
Even though it is helpful to understand the rate of growth each year relative to today’s figure, it may be more insightful estimating the rate at which the business is growing on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of First Horizon National’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -2.9%. This means, we can presume First Horizon National will chip away at a rate of -2.9% every year for the next couple of years.
For First Horizon National, I’ve put together three relevant factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is FHN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FHN is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FHN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.