UPDATE: FIG Partners Downgrades First Horizon National Corporation to Market Perform, Raises PT

In a report published Wednesday, FIG Partners downgraded its rating on First Horizon National Corporation

to Market Perform, but raised its price target to $10.25. FIG Partners noted, “We are lowering our recommendation on FHN to ‘Market-Perform' based on recent price rally and our outlook that 2013 EPS remain cloudy at FHN relative to other regional banks due to uncertain fee income trends. No change in our EPS estimates: 3Q12 projection is $0.17, two pennies less than Street consensus due to less conviction on recovering Capital Markets revenue. Our 2013 EPS outlook also unchanged at $0.85 (one penny shy of consensus estimates). Yes, its is true that Mortgage Rescission provisions were ‘front-loaded' in the last quarter and that 3Q12 charges should be significantly lower and support true profitability in the current quarter. But, the equity market has now recognized this along with the fact that FHN's share count should decline from buyback activity. FHN shares are priced at nearly 11.5x 2013 EPS. We think a 12x P/E cannot be ruled out and it is possible that FHN is able to reduce overhead costs such that revenue weakness on Capital Markets (see below) is offset. This is a highly uncertain scenario and market expectations will largely be driven by what is reported in Mid-October 2012 for 3Q-2012 earnings results.” First Horizon National Corporation closed on Tuesday at $9.66.