First Horizon Corporation (NYSE: FHN) experienced a significant surge in call options trading on Monday, with investors purchasing a total of 30,287 call options. This figure marks a notable increase of 74% compared to the average daily volume of 17,374 call options, indicating heightened interest in the company’s stock.
Analysts Weigh In on First Horizon
Several research firms have recently shared their insights on First Horizon, contributing to the positive momentum surrounding the stock. Deutsche Bank Aktiengesellschaft initiated coverage on December 16, 2023, assigning a “buy” rating with a target price of $28.00. Meanwhile, Robert W. Baird reaffirmed a “neutral” rating with a target price of $25.00 in a report issued on December 11, 2023.
Further supporting the stock’s outlook, Stephens raised its target price from $28.00 to $29.00, classifying First Horizon as “overweight” on January 16, 2024. In the same vein, Keefe, Bruyette & Woods increased their price target from $24.00 to $25.00, maintaining a “market perform” rating.
Additionally, Raymond James Financial raised its target price from $23.00 to $27.00, giving the stock an “outperform” rating on January 7, 2024. Collectively, one analyst has issued a “Strong Buy” rating, while ten have rated the stock as a “Buy” and nine have designated it as a “Hold.” According to data from MarketBeat.com, First Horizon holds a consensus rating of “Moderate Buy” with an average target price of $26.66.
Institutional Investment Activity
Institutional investors have also been active in adjusting their holdings of First Horizon. Norges Bank acquired a new position in the fourth quarter valued at approximately $153.9 million. Similarly, Artemis Investment Management LLP purchased a stake in First Horizon worth around $90.3 million during the same period.
In a notable increase, Azora Capital LP expanded its position by an impressive 1,020.5% in the second quarter, now owning over 2.6 million shares valued at about $55.3 million. Jupiter Asset Management Ltd. also entered the market with a new stake valued at approximately $49.2 million. Furthermore, JPMorgan Chase & Co. increased its holdings by 45%, now owning around 6.7 million shares worth $142.9 million.
Institutional investors collectively own approximately 80.28% of First Horizon’s stock, indicating strong confidence in the company’s growth potential.
First Horizon’s stock traded at $22.01 during mid-day trading on Monday, reflecting a gain of $0.27. The trading volume reached 1,230,119 shares, surpassing the average volume of 6,491,892. The company holds a market capitalization of $10.63 billion and maintains a price-to-earnings ratio of 11.71.
Quarterly Earnings and Dividend Increase
On January 15, 2024, First Horizon announced quarterly earnings, reporting earnings per share (EPS) of $0.52, which exceeded analysts’ expectations of $0.46 by $0.06. The company reported revenue of $892 million, surpassing forecasts of $863.87 million. The return on equity stood at 11.21% with a net margin of 19.67%.
In a positive development for shareholders, First Horizon declared a quarterly dividend of $0.17 per share, set to be paid on April 1, 2024, to shareholders of record on March 13, 2024. This marks an increase from the previous quarterly dividend of $0.15, translating to an annualized dividend of $0.68 and a dividend yield of 3.1%. The company’s payout ratio stands at 36.17%.
Company Overview
First Horizon Corporation, headquartered in Memphis, Tennessee, is a diversified financial services firm offering a range of retail, commercial, and wealth management solutions. As the largest bank-based financial services institution in Tennessee, First Horizon operates through a network of branches and digital platforms across the Southeastern United States. The firm provides personal and business banking services, mortgage origination and servicing, payment solutions, and treasury management services. Established in 1864 as the First National Bank of Memphis, First Horizon has expanded through strategic acquisitions and organic growth to serve customers in states including Tennessee, Texas, North Carolina, South Carolina, Georgia, and Florida.
