Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- First Horizon National (NYSE: FHN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The gross profit margin for FIRST HORIZON NATIONAL CORP is currently very high, coming in at 89.86%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -31.80% is in-line with the industry average.
- FIRST HORIZON NATIONAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, FIRST HORIZON NATIONAL CORP swung to a loss, reporting -$0.11 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.11).
- FHN, with its decline in revenue, slightly underperformed the industry average of 1.2%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, FIRST HORIZON NATIONAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.