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    First Horizon (FHN) Stock Still Looks Reasonable Despite Its 135% Run

    Simply Wall St·09/27/2026 02:25:06
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    First Horizon has seen its share price move around in recent years, and the current level near US$23.46 raises a direct question for you as an investor. Is today’s market price properly reflecting the returns First Horizon earns on the capital it puts to work in its banking business, or has the share chart started to tell a different story from the underlying economics?

    • Over the past 3 years, First Horizon has returned about 134.9%, which puts real weight on whether that share gain is matched by the returns the bank is generating on its capital base.
    • The business model leans heavily on how effectively management can turn deposits and other funding into interest earning assets, so the way it converts that capital into profits and cash flow can shape what a fair valuation range looks like.
    • If you'd rather focus on earnings, this one's for you. See what First Horizon's 10.8x P/E says about the price.

    The stock’s next move may depend on whether the returns First Horizon earns on its capital are strong enough and durable enough to make today’s share price look well supported.

    If you want a second reference point on whether returns on capital like First Horizon's line up with share prices elsewhere, start a focused search using the 32 high quality undervalued stocks

    Is First Horizon Still Cheap on Excess Returns?

    The Excess Returns model asks whether First Horizon is earning more on shareholder capital than it costs to fund that capital. For this bank, the picture is framed by a Book Value of $17.91 per share and a Stable Book Value of $19.71 per share, which gives you a sense of the equity base the earnings power sits on.

    Analysts see Stable EPS at $2.39 per share, compared with a Cost of Equity of $1.43 per share, which implies an Excess Return of $0.96 per share. That is consistent with an Average Return on Equity of 12.11%, so the shares at $23.46 are being weighed against a business that the model treats as earning more than its equity charge on a fairly steady footing. The Excess Returns projections put First Horizon's estimated intrinsic value substantially above the current share price, so the gap between the economics of the franchise and where the stock trades remains meaningful for long term investors who care about return on capital. Find out what First Horizon could be worth using our Excess Returns estimate.

    The First Horizon Narrative: What Would Justify Today's Price?

    First Horizon's valuation puzzle invites a second question. What story about future growth, profitability and risk would need to be true for this banking group to be worth meaningfully more or less than where it trades today? That is the role of Simply Wall St Narratives on the Community page, where each scenario links its number to a specific view on how First Horizon's earnings power, cost base and risk profile might evolve as fresh information comes through.

    One of the top community narratives on First Horizon: 16% undervalued

    "Deployment of technology and AI tools such as ChatFHN, automated financial spreading and AI assisted coding is intended to let First Horizon add front office producers while keeping support costs largely flat..."

    Discover why this Narrative puts First Horizon at 16% undervalued.

    Before acting on First Horizon's valuation, look at who is steering the ship

    Numbers only tell part of the story for First Horizon, because the people making the key decisions and the way their pay is structured can strongly influence how that capital is treated over time. See who runs First Horizon and how they are paid.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.