UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT on First Horizon National

In a report published Monday, J.P. Morgan & Co. reiterated its Overweight rating on First Horizon National FHN, but slightly lowered its price target from $11.50 to $11.00. J.P. Morgan noted, “FHN reported 3Q EPS of $0.10, which translated into a ~5% ROTE. Although we thought this was potentially the first quarter since early 2007 that they were positioned to post a near double digit ROTE, the company missed as a result of needing to provide an extra $30 million in provision expense related to new OCC guidance. Consequently, despite NIM holding relatively steady, the shares finished 3.6% lower. While the market has taken a relatively pessimistic view on FHN (as evidenced by one of the cheapest valuations in the group) given all of the noise tied to the turnaround story, while it's difficult to peg the exact quarter that the reported ROTE is at or above peers, we think the deck is finally stacked in the company's favor. As it moves full steam ahead with efficiency initiatives (which are being reached a full year earlier) we believe a cleaner and consistently more profitable FHN (with an ROTE in the 9-10% range) is now around the corner. As the story moves away from the noise, including around putbacks, we look forward to more boring quarters that should drive a more narrow discounted valuation, rendering FHN shares an outperformer.” First Horizon National closed on Friday at $9.33.