On Thursday, RBC Capital Markets adjusted its outlook for First Horizon (NYSE:FHN) National Corporation (NYSE:FHN) shares, raising its price target to $20 from $19 while maintaining an Outperform rating on the stock. The revision follows the company's third-quarter results, which were seen as a testament to the robustness of First Horizon's diversified business model.
The bank's performance in the third quarter was marked by a mix of headwinds and strengths. Despite pressures on net interest income (NII) and the net interest margin (NIM) due to the prevailing rate environment and rising deposit costs, First Horizon's fee income and fixed income trading activities provided strong counterbalances.
The firm also noted that core expenses were kept under control, credit metrics appeared favorable, and the stock buyback program continued to be active.
First Horizon's outlook does anticipate ongoing margin challenges in the near term. However, RBC Capital highlighted a modest positive trend in revenue projections, buoyed by the momentum in fee-based income. This optimistic view on revenue has led to the adjusted price target, reflecting confidence in the bank's capacity to navigate the current financial landscape.
The analyst's statement underscored the solid quarter for First Horizon, emphasizing the company's ability to offset certain adverse conditions with its strengths in other areas.
"Although the outlook does call for continued margin headwinds in the near-term, we see a modest positive bias to revenues given the fee momentum," the analyst remarked, indicating a finely-tuned approach to the bank's estimates and price target going forward.
The bank's recent performance and the updated assessment from RBC Capital Markets will be of interest to investors as they consider the prospects of First Horizon in a fluctuating economic environment. The new price target of $20 represents the firm's current view on the stock's potential in light of recent developments.
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