First Horizon (FHN): Valuation Spotlight as Analyst Upgrades Fuel Optimism Ahead of Earnings

First Horizon (FHN) is catching attention as several Wall Street analysts have revised their earnings outlook upward ahead of the company’s next report. This has fueled optimism for both earnings and revenue growth this quarter.

See our latest analysis for First Horizon.

First Horizon has attracted attention lately after its CFO was recognized on American Banker’s 2025 Most Powerful Women in Banking list for the second year in a row, and the company extended its share buyback initiative. Despite a touch of volatility, shares have posted a solid 11.3% year-to-date gain, while the one-year total shareholder return stands at an impressive 40%. Momentum has been building for long-term holders, especially in light of improving analyst sentiment and steady progress on management goals.

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But with shares already up sharply this year and analysts boosting their price targets, is First Horizon still undervalued, or have markets already priced in the next phase of its growth, leaving little room for upside?

Most Popular Narrative: 11.2% Undervalued

First Horizon’s narrative fair value of $25.07 sits noticeably above the most recent closing price of $22.26, pointing to potential upside according to the most widely followed scenario. The gap highlights ongoing debate about whether the market is fully recognizing the fundamentals shaping future growth expectations.

The diversified business model, offering countercyclical revenue support, may shield earnings from macroeconomic volatility and ensure a steady revenue stream across various interest rate environments. Increased focus on cost discipline and expense management can potentially improve net margins and bolster pre-provision net revenue growth.

Read the complete narrative.

Want to know the secret behind this attractive valuation? The fair value depends on a handful of forward-looking assumptions that might surprise you. Curious which financial forces power the projection, and what levers could swing the upside case? Get the full story on the headline drivers fueling this narrative.

Result: Fair Value of $25.07 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent macroeconomic uncertainty and rising provision expenses could pressure First Horizon’s earnings and put near-term growth expectations at risk.

Find out about the key risks to this First Horizon narrative.

Another View: Is the Market Getting Ahead of Itself?

Looking at price-to-earnings, First Horizon trades at 13.9x, which is noticeably pricier than both the US Banks industry average (11.6x) and its peer group (12x). Even when compared to its own fair ratio of 13.3x, the stock looks stretched. Is the recent optimism overdone, or is there more upside left?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own First Horizon Narrative

If you’d rather see the numbers for yourself or take a fresh perspective, you can generate a custom narrative in just a few minutes, your way with Do it your way.

A great starting point for your First Horizon research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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