Value
7.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.5 |
| P/S | 7.8 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 10.0x
- ▸PEG: 0.49
- ▸Attractively valued
FHN · Why this verdict
Why First Horizon (FHN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
First Horizon has compiled a perfect four-quarter earnings beat streak averaging more than 10% above consensus and screens attractively at a forward P/E of 10.5x with a PEG of 0.36; however, there is no identified competitive moat to sustain long-term earnings power, the put/call ratio of 7.22 signals pronounced bearish options positioning, and the stock offers only 0.7% upside to its near-term resistance with an unfavorable risk/reward.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The absence of an identified competitive moat means the bank's 30% margins and earnings power depend on cyclical and market factors rather than structural advantages, making future returns less predictable than for moat-protected peers. Quality breakdown | Net margin holds above 28% for 4 consecutive quarters, demonstrating sustained profitability despite the absence of a competitive moat. | →Stable |
| CounterMany regional banks generate above-average returns for extended periods through local relationship advantages, deposit franchises, and community presence that are functionally durable even without a formal competitive moat designation. | ||
The bank has beaten earnings estimates in each of the last four quarters, averaging more than 10% above consensus, and the next earnings report is due within approximately 30 days—making the upcoming print a near-term catalyst that could either extend or break the streak. Earnings | EPS exceeds consensus by more than 5% in the next reporting period, extending the beat streak to a fifth consecutive quarter. | ↓Deteriorating |
| CounterWith four consecutive beats already reflected in the price, analyst expectations have likely been reset higher; a print that merely meets rather than beats could disappoint the market even if results are fundamentally sound. | ||
At a forward P/E of 10.5x and a PEG of 0.36, the stock offers a valuation that compensates generously for its growth rate, providing a margin of safety that limits downside if results disappoint modestly. Valuation breakdown | The forward P/E expands toward 13x as the market narrows the valuation discount, generating price appreciation independent of earnings growth. | →Stable |
| CounterRegional banks without competitive moats often trade at structurally low multiples because they lack the durable earnings power that justifies a re-rating; the low PEG may reflect a permanent discount rather than a value opportunity. | ||
A put/call ratio of 7.22 is unusually high and indicates the options market is heavily skewed toward protective or bearish positioning, which can suppress price momentum and amplify any negative catalyst. Risk breakdown | The put/call ratio normalizes below 2.0 over the next two quarters as bearish positioning unwinds following a continued positive earnings trend. | ↑Improving |
| CounterExtreme put/call skew can act as a contrarian signal; if the expected negative event—particularly around the upcoming earnings report—fails to occur, the forced unwind of bearish positions could drive a sharp move higher. | ||
On-balance volume is falling even as the stock price holds above the 200-day moving average, suggesting that buying pressure is diminishing at elevated levels—a divergence that can precede a trend reversal. Momentum breakdown | On-balance volume turns positive and rises for 6 consecutive weeks, confirming that buying interest is re-engaging rather than fading at current levels. | ↓Deteriorating |
| CounterPrice above the 200-day average in a breakout setup can sustain even with modest volume distribution; the trend-following price signal may matter more than the volume divergence in the near term. | ||
The absence of an identified competitive moat means the bank's 30% margins and earnings power depend on cyclical and market factors rather than structural advantages, making future returns less predictable than for moat-protected peers.
→StableQuality breakdown
- Expectation
- Net margin holds above 28% for 4 consecutive quarters, demonstrating sustained profitability despite the absence of a competitive moat.
CounterMany regional banks generate above-average returns for extended periods through local relationship advantages, deposit franchises, and community presence that are functionally durable even without a formal competitive moat designation.
The bank has beaten earnings estimates in each of the last four quarters, averaging more than 10% above consensus, and the next earnings report is due within approximately 30 days—making the upcoming print a near-term catalyst that could either extend or break the streak.
↓DeterioratingEarnings
- Expectation
- EPS exceeds consensus by more than 5% in the next reporting period, extending the beat streak to a fifth consecutive quarter.
CounterWith four consecutive beats already reflected in the price, analyst expectations have likely been reset higher; a print that merely meets rather than beats could disappoint the market even if results are fundamentally sound.
At a forward P/E of 10.5x and a PEG of 0.36, the stock offers a valuation that compensates generously for its growth rate, providing a margin of safety that limits downside if results disappoint modestly.
→StableValuation breakdown
- Expectation
- The forward P/E expands toward 13x as the market narrows the valuation discount, generating price appreciation independent of earnings growth.
CounterRegional banks without competitive moats often trade at structurally low multiples because they lack the durable earnings power that justifies a re-rating; the low PEG may reflect a permanent discount rather than a value opportunity.
A put/call ratio of 7.22 is unusually high and indicates the options market is heavily skewed toward protective or bearish positioning, which can suppress price momentum and amplify any negative catalyst.
↑ImprovingRisk breakdown
- Expectation
- The put/call ratio normalizes below 2.0 over the next two quarters as bearish positioning unwinds following a continued positive earnings trend.
CounterExtreme put/call skew can act as a contrarian signal; if the expected negative event—particularly around the upcoming earnings report—fails to occur, the forced unwind of bearish positions could drive a sharp move higher.
On-balance volume is falling even as the stock price holds above the 200-day moving average, suggesting that buying pressure is diminishing at elevated levels—a divergence that can precede a trend reversal.
↓DeterioratingMomentum breakdown
- Expectation
- On-balance volume turns positive and rises for 6 consecutive weeks, confirming that buying interest is re-engaging rather than fading at current levels.
CounterPrice above the 200-day average in a breakout setup can sustain even with modest volume distribution; the trend-following price signal may matter more than the volume divergence in the near term.
Per-dimension breakdown
Quality
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.6 |
| ROA | 0.6 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 10.0 |
| Moat | 3.6 |
| Piotroski F | 4.4 |
- ▸Strong margins: 23%
- ▸No competitive moat
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| EPS growth | 10.0 |
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.9 |
| OBV | 1.0 |
| MA position | 4.5 |
| Volume | 2.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.3 |
| erm sentiment | 4.7 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Negligible insider selling — $455,142 (0.004% of mkt cap)
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 1.4 |
| growth rank | 0.0 |
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 3.6 |
| 52w position | 7.7 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 10.0 |
| volatility | 7.6 |
| put call | 4.4 |
| implied vol | 6.8 |
| max pain risk | 3.0 |
| beta | 9.2 |
- ▸Above max pain $14
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.5 |
| dividend safety | 5.5 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:75d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.1<4.5
- ASYMMETRY:1.0<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
0.97
Upside
+4.8%
Downside
5.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 48
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 4.1<4.5 outcome against Growth at 10.0 and asymmetric R:R of 0.97.
The strongest dimensions are Growth at 10.0, Value at 7.9, and Risk (lower is worse) at 7.3; the weakest are Peer rank at 2.3, Quality at 3.0, and Momentum at 4.1. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak Near Term Catalyst
Trip ifEPS surprise falls below 0% in the next reporting quarter.
- P2Attractive Valuation Low Peg
Trip ifForward P/E expands above 14x for 2 consecutive quarters, indicating the valuation discount has substantially resolved.
- P3No Competitive Moat
Trip ifNet margin holds above 28% for 4 consecutive quarters, demonstrating sustained profitability despite the absence of a competitive moat.
- P4Elevated Put Call Bearish Positioning
Trip ifPut/call ratio falls below 2.0 for 2 consecutive months, indicating bearish positioning has substantially cleared.
- P5Volume Distribution Despite Price Strength
Trip ifOn-balance volume rises above its prior 6-week average for 6 consecutive weeks, confirming buying interest is re-engaging.