Intel stock extends gains after report of possible U.S. government stake
On Wednesday, Raymond (NSE:RYMD) James adjusted its price target for First Horizon National Corp (NYSE:FHN), reducing it to $20 from the previous $22, while maintaining an Outperform rating on the shares. The adjustment follows First Horizon’s first-quarter 2025 results, which surpassed both Raymond James’ and consensus estimates in terms of core EPS and pre-provision net revenue (PPNR). Currently trading at $17.27 with a P/E ratio of 12.79, InvestingPro analysis suggests the stock is undervalued, with additional insights available in the comprehensive Pro Research Report. Despite the positive performance, the firm’s analysts have revised their EPS estimates downwards, adopting a more cautious stance on credit.
Analysts at Raymond James have shifted their modeling to the upper end of First Horizon’s net charge-off (NCO) guidance, suggesting a potential for further modest reserve builds. They also noted that First Horizon’s noninterest expense guidance indicates a significant growth trajectory over the next three quarters, which may pose challenges to achieving positive PPNR growth within the year, despite the company’s reiteration of this goal during their earnings call.
The report acknowledges that while there are challenges ahead, the outlook for First Horizon remains positive. The analysts believe that lower interest rates would benefit the company’s counter-cyclical businesses and highlighted First Horizon’s strong capital ratios, which could support ongoing share repurchases. The common equity tier 1 (CET1) ratio is expected to remain around 11%, with the first quarter of 2025 recording a CET1 ratio of 10.9%.
Credit trends for First Horizon are still considered benign, and the appeal for a potential takeover remains high. However, Raymond James anticipates that the current economic uncertainty and market volatility are likely to dampen merger and acquisition activity in the banking industry in the near term.
In other recent news, First Horizon National Corporation reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.42, surpassing the analyst forecast of $0.40. However, the company’s revenue fell short of expectations, registering $812 million against the projected $823.88 million. Despite the revenue miss, First Horizon’s net interest margin increased by 9 basis points to 3.42%, reflecting effective management of interest-bearing deposits. The company also repurchased $360 million in shares, indicating strong cash flow and a strategic allocation of capital. Analysts from firms like Raymond James and RBC Capital Markets noted the company’s cautious approach to economic uncertainties, such as potential rate cuts and tariff impacts. First Horizon maintained its guidance for 2025, anticipating low single-digit loan growth and aiming for a return on tangible common equity of over 15%. The bank’s diversified business model continues to provide stability amidst economic challenges, as emphasized by CEO Brian Jordan.
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