Market Trends - Earnings have performed well despite political challenges in the financial services industry, indicating resilience among consumers and companies [1] - The S&P 500 is projected to reach 7,700, representing a 10% to 12% increase from the previous year's close, although no expansion in valuations is expected [1] Investment Preferences - Preference for larger- and mid-cap US stocks over international stocks in a global bull market, with a neutral stance on developed international and emerging markets [2] - Emerging markets are viewed as a cheaper way to gain exposure to technology and AI, but the current moment is not seen as the right time for increased international exposure [2] Stock Recommendations - Webster Financial Corporation (NYSE:WBS) is highlighted as a top large-cap value stock for 2026, with an average upside potential of 16.23% and 52 hedge fund holders [7] - RBC Capital raised its price target for Webster Financial to $72 from $70, maintaining an Outperform rating, citing improvements in loan volume and revenue growth [8] - First Horizon Corporation (NYSE:FHN) is also recommended, with an average upside potential of 16.09% and 52 hedge fund holders, and a price target increase to $27 from $25 by DA Davidson [12] - Strong revenue growth of up to 7% is anticipated for First Horizon due to steady loan growth and improved lending performance [12][13]

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Group 1 - The core focus of iREIT+HOYA Capital is on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment group targets high-yield, dividend growth opportunities, aiming for dividend yields up to 10% across various asset classes including REITs, ETFs, closed-end funds, and preferred stocks [2] - The service offers a free two-week trial for potential investors to explore its exclusive income-focused portfolios [1] Group 2 - The investment philosophy emphasizes defensive stocks with a medium- to long-term horizon, catering to investors seeking dependable monthly income [2] - The group provides comprehensive investment research to assist investors in making informed decisions regarding income-focused investments [2]

Core Insights - Three stocks with strong momentum and buy rankings are highlighted for investors: RF Industries, Morgan Stanley, and First Horizon Group 1: RF Industries (RFIL) - RF Industries is engaged in the design, manufacture, and distribution of coaxial connectors for radio communications and other applications [1] - The company has a Zacks Rank of 1 (Strong Buy) and a 22.9% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - RF Industries' shares gained 14.5% over the last three months, outperforming the S&P 500's gain of 3% [2] - The company possesses a Momentum Score of A [2] Group 2: Morgan Stanley (MS) - Morgan Stanley is a leading financial services holding company serving a diverse clientele, including corporations and governments [2] - The company has a Zacks Rank of 1 and a 4.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] - Morgan Stanley's shares gained 17.4% over the last three months, also outperforming the S&P 500's gain of 3% [3] - The company possesses a Momentum Score of A [3] Group 3: First Horizon (FHN) - First Horizon offers a range of financial services, including regional banking, mortgage lending, and wealth management [4] - The company has a Zacks Rank of 1 and a 6.7% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [4] - First Horizon's shares gained 18.2% over the last three months, significantly outperforming the S&P 500's gain of 3% [5] - The company possesses a Momentum Score of A [5]

Group 1 - TD Cowen raised the price target on First Horizon (FHN) to $27 from $26 while maintaining a Hold rating on the shares [1] - The firm updated its model following solid Q4 results and guidance, highlighting improved lending with strong Commercial and Industrial (C&I) growth [1] - The 2026 guidance is favorable but likely requires significant contributions from countercyclical fees [1]

Core Viewpoint - First Horizon Corporation reported strong fourth-quarter earnings, exceeding analyst expectations with significant year-over-year profit growth [1] Financial Performance - Earnings per share for the fourth quarter were $0.52, surpassing the consensus estimate of $0.46 [1] - Net income available to common shareholders reached $257 million, a 1% increase from the prior quarter and a 63% increase from the same period last year [1] - Full-year 2025 net income available to common shareholders was $956 million, up 29% from 2024, with earnings per share rising to $1.87 from $1.36 [4] Revenue and Income - Revenue for the quarter was $888 million, essentially flat sequentially but up 22% year over year [2] - Net interest income was $676 million, slightly higher than the third quarter, while net interest margin declined by 4 basis points to 3.51% due to Federal Reserve rate cuts [2] Loan and Asset Quality - Period-end loans increased by 2% to $64.2 billion, primarily driven by a 20% increase in lending to mortgage companies [3] - The allowance for credit losses to loans ratio improved to 1.31% from 1.38% in the previous quarter, indicating stable asset quality [3] - Net charge-offs totaled $30 million, or 0.19% of average loans, compared to 0.17% in the third quarter [3]

Core Viewpoint - First Horizon Corporation (FHN) reported better-than-expected fourth-quarter 2025 results, with adjusted earnings per share of 52 cents, exceeding the Zacks Consensus Estimate of 47 cents and up from 43 cents in the same quarter last year [1][9] Financial Performance - The company's net income available to common shareholders (GAAP basis) was $257 million, a 63% increase year over year, benefiting from higher net interest income (NII) and a significant rise in non-interest income, with no provision for credit losses recorded [2][11] - For the full year 2025, adjusted earnings per share reached $1.89, surpassing the Zacks Consensus Estimate of $1.84, and reflecting a 22% increase from the previous year [3] - Total quarterly revenues were $888 million, a 22% year-over-year increase, exceeding the Zacks Consensus Estimate by 2.9% [4] Revenue and Expenses - Total revenues for 2025 were $3.42 billion, growing 7% year over year and also surpassing the Zacks Consensus Estimate of $3.39 billion [4] - NII increased by 7% year over year to $676 million, with the net interest margin rising 18 basis points to 3.51% [4] - Non-interest income was reported at $212 million, more than double the year-ago level, primarily due to the absence of securities portfolio restructuring losses [5] Efficiency and Cost Management - The efficiency ratio improved to 61.33%, down from 61.98% in the same quarter last year, indicating enhanced profitability [6] - Non-interest expenses rose 7% year over year to $545 million, driven by higher personnel costs and other operational expenses [5] Loan and Deposit Growth - Total period-end loans and leases were $64.16 billion, a 3% increase from the year-ago quarter, while total period-end deposits rose to $67.47 billion, also up 3% year over year [7] Credit Quality - Non-performing loans and leases totaled $604 million, slightly up from the previous year, while the allowance for credit losses to loans and leases ratio decreased to 1.31% from 1.43% [8] - Net charge-offs increased to $30 million from $13 million in the year-ago quarter, with no provision for credit losses recorded in the fourth quarter [8][9] Capital Ratios - As of December 31, 2025, the common equity tier 1 ratio was 10.6%, down from 11.2% a year ago, and the total capital ratio decreased to 13.4% from 14.2% [10]

Core Insights - First Horizon Corp reported fourth-quarter earnings of 52 cents per share, exceeding the analyst consensus estimate of 46 cents per share [1] - The company achieved quarterly sales of $888 million, surpassing the analyst consensus estimate of $859.343 million [1] Financial Performance - The fourth quarter performance was described as strong, contributing to an outstanding year for First Horizon, with consistent execution of strategy leading to significant earnings growth [2] - The stock price fell by 1.1% to $24.17 following the earnings announcement [2] Analyst Ratings and Price Targets - Keefe, Bruyette & Woods analyst Christopher McGratty maintained a Market Perform rating and raised the price target from $24 to $25 [3] - Stephens & Co. analyst Russell Gunther maintained an Overweight rating and increased the price target from $28 to $29 [3] - TD Cowen analyst Janet Lee maintained a Hold rating and raised the price target from $26 to $27 [3] - DA Davidson analyst Peter Winter maintained a Neutral rating and increased the price target from $25 to $27 [3]

Core Viewpoint - First Horizon Corporation reported strong earnings for Q4 2025, exceeding expectations with an EPS of $0.52 and revenue of approximately $869.5 million, indicating robust financial performance and positive outlook for 2026 [1][6]. Financial Performance - The net income available to common shareholders (NIAC) for 2025 increased by 29% to $956 million, translating to an EPS of $1.87, which is a 38% increase from the previous year's EPS of $1.36 [3][6]. - In Q4, the NIAC grew by 1% to $257 million, with an EPS of $0.52, and the adjusted NIAC was $259 million, reflecting a 2% increase from Q3 [4][6]. Strategic Initiatives - First Horizon's strong credit quality, limited exposure to commercial real estate, and stable deposit levels have contributed to its solid financial standing [2]. - The company's leadership expressed satisfaction with the strong Q4 performance, which capped off an outstanding year, and indicated a revenue growth forecast of 3% to 7% for 2026, along with an acceleration in loan growth [5][6]. Market Valuation - The company maintains a price-to-earnings (P/E) ratio of 11.8 times the estimated 2026 EPS, suggesting a fair market valuation [2].

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