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From the vast universe of banking stocks, today we pick First Horizon National Corporation FHN for you. The company offers a profitable investment opportunity based on inorganic growth expansion and robust fundamentals.
The company has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for 2020 and 2021 has exhibited an upward trend.
Further, this Zacks Rank #1 (Strong Buy) stock has gained 27.2%, in the past six months, compared with the industry’s growth of 12.4%.
Why is First Horizon a Golden Egg?
Earnings Strength: First Horizon recorded an earnings growth rate of 11.1% over the last three to five years. Sustaining this momentum, the earnings growth rate is anticipated to be around 34.8% for the next year. Further, the company has a trailing four-quarter earnings surprise of 8.94%, on average.
Revenue Strength: First Horizon’s sales have seen a compounded annual growth rate of 16.1% over the last five years (2015-2019). Also, the trend is expected to continue in the near term, as highlighted by its projected sales growth rate of 11.46% for 2021.
Strategic Moves: First Horizon has executed several strategic repositioning efforts to improve long-term profitability after being severely affected by its exposure to national mortgage and construction lending. It has also focused on growing its core Tennessee banking franchise. Further, the company was involved in a number of acquisitions, which greatly diversified its product offerings, and strengthened footprint in the Carolina and Florida markets. This July, the company merged with IBERIABANK Corporation. Per First Horizon’s expectations, the deal is likely to be 16% accretive to earnings by year-end 2021, while around 22% EPS accretion is projected for IBERIABANK.
Stock Looks Undervalued: The stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Other Stocks to Consider
JMP Group LLC JMP has witnessed upward earnings estimate revisions for 2021 over the past 60 days. Moreover, this Zacks #2 Ranked stock has gained 32.7% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Morgan Stanley’s MS next-year earnings estimate moved north in 60 days’ time. Further, the company’s shares have surged 40.9% over the past six months. At present, it carries a Zacks Rank of 2.
Evercore Inc EVR has witnessed recorded upward earnings estimate revision for the ongoing year in the past 60 days. This Zacks #2 Ranked stock has appreciated 89.3% over the past six months.
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Morgan Stanley (MS) : Free Stock Analysis Report
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