The Frustrating Wait For Positive Differentiation From First Horizon Goes On

 

The bull thesis on First Horizon (FHN) has centered around the ideas that management has learned important lessons from mistakes of the past and that, coupled with the leverage and synergy opportunities provided by the Iberiabank deal, the bank was about to set out on a new path of better growth and higher returns.

It’s premature to call this an impromptu rendition of Waiting for Godot, but it’s getting harder to make the “the turnaround is coming, and things are going to get better” argument stick after ongoing performance that’s really rather more “okay” than “good” (or better). With that, the shares have modestly trailed the regional bank group since my last update, while other bank stocks I like including Citizens (CFG), Key (KEY), Synovus (SNV), and Zions (ZION) have all done noticeably better.

First Horizon shares still look undervalued and priced for a double-digit return, not to mention well-leveraged to the upside, but valuation alone doesn’t move stocks and these shares really need to see a marked improvement in performance. As a shareholder myself, I have to admit that my patience is wearing thin, particularly with other banks offering similar upside and showing more operational upside.

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The Frustrating Wait For Positive Differentiation From First Horizon Goes On