First Horizon (FHN) opened Q2 2026 with total revenue of US$871 million and basic EPS of US$0.55, alongside trailing 12 month net income of US$1.03 billion and EPS of about US$2.11. Over recent quarters the company has seen revenue move from US$800 million in Q2 2025 to US$894 million in Q3 2025, US$888 million in Q4 2025, US$847 million in Q1 2026 and now US$871 million. Over the same period, quarterly basic EPS stepped from US$0.46 to US$0.50, US$0.52, US$0.54 and US$0.55. With net margin higher over the past year and earnings growth outpacing revenue, this set of results keeps the focus firmly on how sustainable First Horizon's recent profitability profile really is.
See our full analysis for First Horizon.With the headline numbers in place, the next step is to see how these results line up with the widely held narratives about First Horizon's growth, risk, and profitability story over the past year.
See what the community is saying about First Horizon
Margins and cost ratios support First Horizon story
- First Horizon reported a Q1 2026 net interest margin of 3.52% and a cost to income ratio of 58.54%, compared with 3.55% and 61.92% in Q3 2025, giving a clearer view of how much it keeps from every dollar of revenue after funding and operating costs.
- Consensus narrative suggests tighter expense control and focus on net interest income could support more stable profitability, and the margin and cost ratios in recent quarters give a concrete way to judge that claim.
- Net interest margin between 3.4% and 3.55% from Q2 2025 to Q1 2026 aligns with the idea that managing interest bearing deposit costs is important for earnings stability.
- The cost to income ratio shifting between roughly 58% and 62% over the same period ties directly to the view that cost discipline can influence how much of revenue turns into net income.
Earnings growth and margins versus longer trend
- On a trailing 12 month basis, First Horizon earned US$1.03b of net income with a net profit margin of 29.3%, and that earnings figure is up 25.9% year on year even though the five year annualized earnings trend declined 2.9% per year.
- Analysts' consensus view points to steadier earnings supported by a diversified business model, and the tension between the stronger recent 25.9% earnings growth and the weaker five year trend gives investors a way to stress test that view.
- The move in net margin from 26.5% to 29.3% over the last year lines up with the idea that cost discipline and fee income mix can support profitability across different conditions.
- At the same time, the five year decline in earnings of 2.9% per year shows that longer term performance has not followed the same path as the latest 12 month improvement, which is relevant when thinking about how durable that improvement could be.
Valuation, dividend, and growth expectations
- With a P/E of 11.7x versus peer and industry averages of 13.0x and 12.3x, a DCF fair value of about US$46.22 compared with a current share price of US$25.40, and a trailing dividend yield of 2.68%, First Horizon’s recent profit metrics and payout sit alongside data that characterizes the stock as trading below both these reference multiples and the DCF estimate.
- Consensus narrative also highlights that forecast revenue growth of 4.6% a year and expected earnings growth of 2.7% are below the cited broader US market figures, which is useful context when thinking about why the P/E and DCF fair value might differ from the current price.
- The roughly 45% gap between the share price and the US$46.22 DCF fair value in the data is one reason some investors may see valuation support despite slower growth forecasts.
- On the other hand, expected earnings of about US$1.1b and EPS of US$2.57 by around July 2029, alongside lower growth rates than the broader market, help explain why analysts group the stock closer to a fairly priced profile around a US$27.95 target rather than assuming rapidly rising multiples.
Next Steps
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for First Horizon on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
If the mix of earnings trends, margins and valuation for First Horizon sounds promising, use the data to pressure test that optimism and form a view quickly. To see which specific positives the market is focused on, review the 4 key rewards.
See What Else Is Out There
While First Horizon's recent 12 month earnings improvement and higher net margin look constructive, the slower forecast revenue and earnings growth versus the broader US market stands out as a weakness.
If you are concerned that First Horizon's slower growth outlook limits its appeal, compare it with companies that pair strong fundamentals with more attractive pricing using the 49 high quality undervalued stocks.
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.
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