First Horizon: Fair Value Rises Amidst Analyst Debate

Analysts have recently recalibrated their expectations for First Horizon, nudging the fair value estimate up to approximately $25.25 per share from a previous estimate of around $24.49. This adjustment is underpinned by a slightly stronger long-term revenue growth outlook, now anticipated at roughly 5.74% annually, an increase from the prior 5.55% projection. The discount rate has also been slightly increased to about 7.12% from 6.93%.

Wall Street sentiment remains largely constructive, with firms such as BofA, Jefferies, Raymond James, and Baird maintaining 'Buy' or 'Outperform' ratings. Their price targets are clustered between $23 and $27, suggesting potential upside from current trading levels, even considering a recent post-earnings selloff. These bullish perspectives highlight solid execution and reaffirmed fiscal year 2025 guidance, viewing management's comments on mergers and acquisitions as a means to preserve strategic options rather than a signal of fundamental weakness.

Further supporting the positive outlook, some analysts point to attractive growth prospects and franchise quality. Factors such as potential benefits from lower interest rates, counter-cyclical business performance, and mid-single-digit loan growth potential in 2026 are cited. Despite acknowledging near-term uncertainty related to M&A overhang and valuation volatility, these firms argue that First Horizon remains a potential acquisition target, and the recent price dip is likely overdone.