Morgan Keegen is out on First Horizon National (NYSE:FHN) saying they strongly believe that new management initiatives are accelerating and should translate into improved profitability and earnings. Recent weakness in bank stock sector and FHN has created a very attractive entry point in what they view as a well orchestrated turnaround story under a superb management team.
FHN shares are selling at a 52 week low and on an absolute basis have pulled back to January 2003 levels. Shares reflect significant discount at 2.2x tangible book versus 3.2x for MK Mid-cap Bank Index.
Firm expects FHN to report 2Q07 EPS of $0.63, $0.04 above consensus and believe that all 3 businesses will reflect marked improvement from 1Q07 results. MK's view is that this is the bottom, expense initiatives are SERIOUS and ACCELERATING, credit should be better than consensus expectations and clearer detail on strategic changes from management will be communicated during earnings.
Notablecalls: I love Morgan Keegan. When I see a strong worded call like this one coming from one of my fav firms, I pay attention. So should you.