Compass Point Maintains a 'Sell' on First Horizon National (FHN); Cutting Estimates After Q1 Misses

April 23, 2012 11:10 AM EDT
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Price: $19.36 -0.62%

Rating Summary:
    9 Buy, 14 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 22 | Down: 33 | New: 34
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Compass Point maintains a 'Sell' on First Horizon National (NYSE: FHN) price target of $8.00.

Analyst, Chris Gamaitoni, said, "FHN reported 2012Q1 EPS of $0.12 which was lower than our estimate of $0.16 and consensus of $0.13. Weaker fundamentals and higher mortgage repurchase provision drove the miss to our estimates. Management has become more cautious in terms of loan growth and mortgage repurchase provision. We are in agreement with management in terms of GSE related mortgage repurchase provision but remain more negative on loan growth and remain cautious related to private label mortgage repurchase losses. Also, there was no meaningful change in home equity related provision and reserves related to the guidance change."

"We are decreasing our 2012Q2 EPS estimate from $0.19 to $0.14, our 2012 EPS estimate from $0.79 to $0.58, and our 2013 EPS estimate from $0.99 to $0.95. In conclusion, we believe fundamentals will be underwhelming in the short-term and foresee negative headlines from private label related matters. We do not see a positive catalyst in the short-term and reiterate our sell on the stock."

For an analyst ratings summary and ratings history on First Horizon National click here. For more ratings news on First Horizon National click here.

Shares of First Horizon National closed at $9.08 yesterday.

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