On Friday, Keefe, Bruyette & Woods made a notable change in their stance on of First Horizon National (NYSE:FHN) stock, upgrading the bank from Market Perform to Outperform. The firm also increased its price target for the stock to $18.00, up from the previous target of $16.00.
The upgrade comes with a positive outlook on the bank's financial performance, as the firm's analyst cited a total return potential of 26%, including dividends. This anticipated return is based on the revised price target and the bank's steady earnings per share (EPS) estimates.
For the fiscal year 2024, the firm maintains its EPS estimate for First Horizon National at $1.45, aligning with the consensus. However, looking ahead to 2025, the firm has raised its EPS estimate slightly to $1.60, up from $1.57. This updated estimate represents a 2% increase and positions it above the current consensus.
The revised price target and upgraded rating reflect the firm's confidence in First Horizon National's ability to deliver shareholder value. The analyst's comments underscore the potential for a strong return on investment, bolstered by the bank's stable earnings projections.
InvestingPro Insights
Following the optimistic outlook from Keefe, Bruyette & Woods on First Horizon National (NYSE:FHN), InvestingPro data aligns with a narrative of resilience and performance. With a market capitalization of $8.17 billion and a P/E ratio that has adjusted to 11.82 over the last twelve months as of Q4 2023, the bank's valuation metrics suggest a stable footing. Despite a slight revenue contraction of 4.18% over the same period, First Horizon National has maintained a robust operating income margin of 38.03%, reflecting efficient management and strong profitability.
Investors may find solace in the bank's consistent dividend payments, a streak that has lasted for 14 years, coupled with a current dividend yield of 4.07%. This commitment to returning value to shareholders is a cornerstone of the bank's financial identity. Additionally, the stock has enjoyed a significant price uptick, with a six-month total return of 43.53%, signaling robust investor confidence which could be poised to continue given the recent analyst upgrade.
InvestingPro Tips highlight that while First Horizon National trades at a high P/E ratio relative to near-term earnings growth, it has managed to remain profitable over the last twelve months. It's also important to note that analysts predict the company will be profitable this year. For those seeking more in-depth analysis, InvestingPro offers additional tips on First Horizon National, with a total of 6 tips available to guide your investment decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for even more insights.
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