First Horizon (FHN) is well-positioned for organic growth, given its differentiated countercyclical businesses, robust capital position, and a considerable deposit market share, Morgan Stanley said in a Tuesday research report.
The company is a robust return on tangible common equity story, analysts wrote, adding that they expect ROTCE to increase to 16% by Q4 2027 on higher buybacks and recovery in net interest margin next year.
The ROTCE model is supported by expectations of higher capital return as the bank brings down its capital levels in line with peers, and an acceleration in fee income growth as it deepens client relationships, along with disciplined expense growth despite risks from higher competition, according to the note.
Loan growth has the potential to ramp up further and even outperform peers, given the bank's exposure to high-growth markets and a rebound in commercial real estate construction, according to Morgan Stanley.
The brokerage said it initiated coverage of the stock with an equalweight rating and price target of $30 per share.
Price: 24.86, Change: -0.09, Percent Change: -0.34
Comments