RBC Capital lifts First Horizon stock target to $24

On Monday, RBC Capital Markets adjusted its outlook on First Horizon National (NYSE:FHN), raising the bank’s price target from $22.00 to $24.00 while sustaining an Outperform rating on the stock. The revision follows recent investor meetings with First Horizon’s top executives, including Chairman, President, and CEO Bryan Jordan, CFO Hope Dmuchowski, and Head of Investor Relations Tyler Craft. The bank, currently valued at $10.36 billion, has demonstrated strong performance with a 38.64% return over the past year. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value calculations.

During the discussions, the management team conveyed a message that aligns with current trends, indicating a stable revenue outlook despite a slight slow down in the lending activity across the industry. The executives also highlighted a stabilization in deposit costs, which is expected to support a steady margin, and discussed potential strategies to mitigate the impact if the Federal Reserve decides to lower interest rates again.

The bank’s approach to managing expenses was described as controlled, and the possibility for further share repurchases was confirmed as an ongoing opportunity. While mergers and acquisitions (M&A) and the significance of surpassing the $100 billion asset threshold were topics of interest among investors, RBC Capital’s analysis suggests that First Horizon’s management is concentrating on internal operations and strategies.

The RBC Capital analyst’s statement underscored the key points from the meetings: "The overall message is consistent with recent trends, and despite some moderation in near-term industry lending activity, the revenue outlook is stable." The analyst further noted the bank’s potential advantages in a changing rate environment: "Other important meeting themes included a bottoming of deposit costs driving a stable margin, countercyclical offsets if Fed rate cuts resume, controlled expenses, and continued share repurchase opportunities."

In conclusion, the discussions with First Horizon National’s executives have reaffirmed RBC Capital’s positive stance on the bank’s stock, leading to an increased price target while maintaining a favorable rating. Trading at a P/E ratio of 13.4x, the stock shows promising fundamentals. For deeper insights into First Horizon’s valuation and growth potential, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.

In other recent news, First Horizon National Corporation reported its first-quarter 2025 earnings, with earnings per share (EPS) of $0.42 surpassing analyst expectations of $0.40, although revenue fell short at $812 million compared to the projected $823.88 million. Jefferies initiated coverage of First Horizon with a Buy rating and a $24 price target, highlighting the bank’s strong capital position and strategic market presence in the Southeast. Meanwhile, Raymond (NSE:RYMD) James adjusted its price target for the company to $20 from $22, maintaining an Outperform rating despite a cautious stance on credit and a revised EPS estimate. Shareholders approved all proposals at the recent annual meeting, including the election of directors, executive compensation, and the appointment of KPMG LLP as the auditor. First Horizon’s strong capital ratios, such as a common equity tier 1 (CET1) ratio of 10.9%, support ongoing share repurchases, with $360 million in shares repurchased during the quarter. The bank’s net interest margin increased by 9 basis points to 3.42%, reflecting efficient deposit management. Analysts from Raymond James also noted that potential rate cuts could favorably impact First Horizon’s counter-cyclical businesses.

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