First Horizon stock price target raised to $25 from $22 at Citi

Citi raised its price target on First Horizon National (NYSE:FHN) to $25.00 while maintaining a Buy rating, citing the regional bank's strong revenue outlook, disciplined expense management, and robust credit performance. This follows FHN's Q2 2025 earnings report, which saw EPS of $0.45 exceed forecasts despite a slight revenue miss, alongside 2% quarter-over-quarter increases in net interest income, loans, and deposits. With the stock up 36% over the past year and analysts revising earnings estimates upward, management expressed optimism for future growth, targeting a $100 million improvement in pre-provision net revenue and over 15% return on tangible common equity within 2-3 years, signaling strong operational momentum and capital allocation for organic growth.

Analysis

Citigroup has raised its price target on First Horizon National (FHN) to $25.00 from $22.00, maintaining a 'Buy' rating, which aligns with broader positive sentiment as seven analysts have recently revised earnings estimates upward. This confidence is supported by FHN's second-quarter 2025 results, where earnings per share of $0.45 beat the $0.42 forecast, although revenue of $830 million slightly missed expectations by $1.93 million. The bank demonstrated solid fundamental growth with a 2% quarter-over-quarter increase in both period-end loans and deposits, which contributed to a $10 million rise in net interest income. Despite a slight compression in its net interest margin to 3.4%, FHN's credit performance remains strong and its capital ratio has improved to 11.0%. Management's optimistic guidance, targeting a $100 million improvement in pre-provision net revenue (PPNR) and a return on tangible common equity (ROTCE) over 15% within three years, signals a clear strategy for future growth. The minimal share repurchases in Q2 are viewed by Citi as a positive indicator of capital being preserved for organic growth activities, reinforcing the bank's strong operational trajectory reflected in its 36% stock return over the past year.

Key Decisions for Investors

• Given the strong earnings beat, positive analyst revisions, and ambitious management guidance on ROTCE, investors could consider the stock favorably, as it appears to have solid operational momentum and a clear growth strategy.
• Investors should monitor the net interest margin, which saw a slight compression to 3.4%; sustained pressure on this metric could offset gains from the reported 2% loan and deposit growth.
• The noted focus on organic growth over share repurchases is a key strategic pivot, so investors should track the efficiency of capital deployment and progress towards the targeted $100 million PPNR improvement to validate this approach.