On Thursday, BofA Securities updated its outlook on First Horizon National (NYSE:FHN), increasing the price target to $18.00 from $17.00, while maintaining a Buy rating on the stock. The adjustment followed First Horizon's first-quarter 2024 earnings per share (EPS) of $0.35, which met BofA Securities' expectations and was slightly above the consensus estimate.
The company's shares showed a positive response to the quarterly results, although the market reaction was subdued. This was attributed to management's comments indicating that deposit costs may have reached their lowest point, contrasting with the relief seen in previous quarters.
Despite this, management has confirmed its forecast for full-year 2024 net interest income (NII) growth, expecting an increase of 1-4%, supported by an asset-sensitive balance sheet.
In light of the recent financial performance, BofA Securities has revised its EPS estimates for First Horizon upwards by approximately 7% to $1.54 for FY24 and $1.60 for FY25. The revision is based on anticipated stronger revenue growth and lower credit costs for FY24. The firm's positive EPS revision underpins the new price objective of $18, up from the previous target of $17.
The analyst's commentary highlighted that the increase in the range for 2024 fee income growth to 6-10% from the previous 4-6% is a contributing factor to the optimistic outlook. First Horizon's steady performance and the updated financial projections have led BofA Securities to reiterate its Buy rating on the company's shares.
InvestingPro Insights
Following the recent earnings report and the updated outlook from BofA Securities, InvestingPro data and tips provide additional context for investors considering First Horizon National (NYSE:FHN). The company's market capitalization stands at a robust $7.78 billion, with a P/E ratio of 9.67, reflecting a potentially attractive valuation when compared to industry peers. Notably, analysts have recently revised their earnings upwards for the upcoming period, signaling optimism in First Horizon's financial prospects.
Despite challenges such as weak gross profit margins, First Horizon has demonstrated a commitment to shareholder returns, maintaining dividend payments for 14 consecutive years. The dividend yield is currently 4.23%, which is compelling for income-focused investors. Additionally, the company has experienced a large price uptick over the last six months, with total returns of 30.71%, indicating strong market confidence.
For a deeper dive into First Horizon's financial health and future outlook, there are 4 additional InvestingPro Tips available. These insights could prove invaluable for investors looking to make informed decisions. To explore these tips and more, visit InvestingPro and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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