First Horizon Corporation heads into its July 15 earnings report with the Street freshly upgrading its price expectations and short sellers quietly retreating.
The analyst picture is the standout this week. Both Raymond James and JP Morgan raised their targets on FHN on July 1, with JP Morgan's Anthony Elian moving to $28.50 from $26.00 — a 9.6% lift — while maintaining Neutral. Raymond James went to $28.00 from $26.00 on an Outperform. The consensus mean target now sits at $27.26, implying roughly 6% upside from the current $25.64. That's a narrow but positive gap, and the direction of travel matters: earlier in Q2, JPMorgan and UBS were both trimming targets amid macro caution, so today's reversal represents a genuine change in tone. The bull case rests on the $34 million net interest income beat from Q1, a 15 basis-point NIM improvement, and 13% quarter-on-quarter growth in core fee income. Bears point to a loan portfolio that shrank $202 million and projected EPS growth of roughly 6% for 2026 — well below the peer median of 12%.
Positioning tells a story of bears in retreat. Short interest has fallen 14% over the past week to 2.7% of the free float — not large in absolute terms, but the directional shift is meaningful given it briefly touched nearly 4% of float in mid-June. The borrow market is extremely loose, with availability at over 4,100% — meaning shares to borrow are abundant relative to current shorts. Cost to borrow has also drifted lower, ending the week around 0.38%, down more than 21% over the past month. The ORTEX short score sits at 33.8, down from 35.6 a week ago, reinforcing the picture of fading short conviction. Options traders are more bullish than usual: the put/call ratio has dropped sharply to 0.50 from a 20-day average of 0.59, putting it 1.7 standard deviations below the mean — close to the most call-heavy reading of the past year.
Valuation remains modest without being a screaming buy. FHN trades at 11.1x earnings and 1.28x book, both up slightly over the past 30 days as the stock has climbed 5.8% during the month. The earnings yield factor scores at 69th percentile — above average but not extreme. Forward EPS momentum is flat (50th percentile on a 90-day basis), and the 12-month forward EPS growth rank scores at just 23 — the weakest factor in the profile. That lines up with the bear case: operationally the bank is improving, but earnings growth is expected to lag peers heading into the back half of 2026.
Peer performance this week provides useful context. RF gained 3.1% and ASB rose 3.0%, outpacing FHN's 2.8% weekly gain slightly. KEY and CFG were more muted, each up around 0.1–1.6%. FHN is broadly tracking the regional bank cohort rather than breaking out or lagging — a sign the July 15 print is the genuine next differentiator. The last earnings release in April triggered a 1.1% drop on the day but a 1.4% gain over the following week, suggesting the market has historically absorbed FHN results with limited immediate drama, even when there is initial disappointment.
With the July 15 print now less than two weeks away, the setup to watch is whether the fresh analyst target upgrades prove prescient — the gap between current price and consensus target is narrow enough that a modest earnings beat, and any absence of the M&A commentary that rattled investors in Q3 2025, could be enough to close it.
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