FHN
First Horizon Corporation
$24.23
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.6% below fair value
You pay
$24.23
Bear
$22.87
Fair
$35.42
Bull
$42.94
Bear
$22.87
-5.6%
ROTCE 10.2% → 1.64x TBV
Fair
$35.42
+46.2%
ROTCE 13.6% → 2.53x TBV
Bull
$42.94
+77.2%
ROTCE 15.6% → 3.07x TBV
Key Value Driver
ROTCE (13.6%) vs. cost of equity (7.8%)
Implied Market Multiple
1.59x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $28.00 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $35.42 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $9.99 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $28.00 (from 35 analysts). Our estimate is 38% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly