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Compass Point Downgrades First Horizon National (FHN) to Sell, Priced to Perfection

September 24, 2012 8:02 AM EDT Send to a Friend
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Price: $12.12 --0%

Rating Summary:
    7 Buy, 14 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 6
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Compass Point downgraded First Horizon National (NYSE: FHN) from Neutral to Sell with a price target of $9.00 (from $8.00).

The firm comments, "Since Aug 1, FHN has appreciated 22% versus a 13% increase in the BKX. Currently, we believe the stock is priced to near perfection. While upside to our earnings assumptions is possible, at the current price, we believe investors are nearly pricing out the potential for any private label putback risk and assigning full credit for their nearly $2 in excess capital. Should Basel III be implemented under the current NPR, FHN's buyback potential could be curtailed. Further, we have no knowledge that a private label lawsuit is in the making; however, an approaching 6-year statute of limitations (on '06 deals) leads us to believe litigation will likely increase in the next 6-12 months. In fact, recent activity corroborates this point. Lastly, while management is doing an excellent job with tackling the controllable aspects of their bank (namely continued expense management), we expect revenue growth will continue to underwhelm."

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 $9.85 yesterday.




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