How Will First Horizon National (FHN) Stock Be Helped By This Analyst Upgrade?

NEW YORK (TheStreet) -- Shares of First Horizon National Corp  (FHN) are lower by -0.25% to $12.01 this morning as the company's rating was raised to "outperform" from "market perform" at Keefe, Bruyette & Woods (KBW) .

The firm now has a $15 price target on the stock, up from its previous $12. 

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Separately, TheStreet Ratings team rates FIRST HORIZON NATIONAL CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate FIRST HORIZON NATIONAL CORP (FHN) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FIRST HORIZON NATIONAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FIRST HORIZON NATIONAL CORP turned its bottom line around by earning $0.10 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 84.7% when compared to the same quarter one year prior, rising from $42.39 million to $78.32 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.7%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • In its most recent trading session, FHN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness 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.
  • You can view the full analysis from the report here: FHN Ratings Report

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