First Horizon’s Loan Cleanup Keeps Its Options Open
First Horizon's loan cleanup may improve profitability by 75 basis points, according to UBS, due to increased asset sensitivity. However, deposit pricing remains a concern, and core revenue disappointed in the latest quarter. UBS maintains a neutral rating and $26 price target.
How this was made
The 30-second read
Why it matters
The neutral rating and modest price target suggest limited upside, but the loan profitability boost could support the stock if deposit costs stay contained.
Market read
First Horizon receives a neutral rating with a $26 target, indicating modest upside potential amid improved loan profitability.
What to watch
Potential effect of higher deposit rates on net interest margin could offset loan profitability gains.
Background
UBS analysts note that First Horizon's loan cleanup improves asset‑sensitivity, adding roughly 75 bps to loan profitability, but core revenue missed expectations and deposit pricing remains a swing factor. UBS maintains a neutral rating with a $26 price target.
Ticker impact
UBS issued a neutral rating on First Horizon with a $26 price target, noting a 75 bps boost to loan profitability.
potential modest upside as market prices in the $26 target
UBS sees improved loan profitability but flags deposit pricing as a risk, leading to a neutral stance.
Market effects
Improved asset‑sensitivity may benefit regional banks and the broader US banking sector.
US banking stocks could see slight positive sentiment from the rating.
Impact is limited to US banks and investors tracking the sector.
Counterpoint
Rating may be too optimistic given ongoing deposit cost pressures.
Key entities
- companyFirst Horizon National Corporation
US regional bank receiving a neutral rating and $26 price target.
- analystUBS
Provided the rating and price target for First Horizon.
