Jefferies Initiates Buy Recommendation for FHN Preferred Stock

Jefferies has initiated a buy recommendation for First Horizon Corporation's preferred stock, FHN.PRF. While institutional ownership has decreased, the average portfolio weight has increased, suggesting a potential positive outlook for investors in the near term.

Date: 22-05-2025

AI Rating: 6

Initiation of Coverage
Jefferies’ initiation of coverage with a buy recommendation for First Horizon Corporation - Preferred Stock (FHN.PRF) indicates a bullish outlook from a reputable financial institution. This can positively influence stock prices as it may attract attention from other investors and institutional funds, potentially leading to increased demand for the shares.

Fund Sentiment
The decreased number of reporting funds from 7 to 5 indicates a slightly negative trend in institutional interest, reflected in a 28.57% decrease in owners over the last quarter. This decrease could suggest that some investors are reducing their exposure to FHN.PRF. However, the fact that the average portfolio weight has seen an increase of 20.19% demonstrates that the remaining investors are committing more resources, which may indicate confidence in the stock among these particular investors. The total shares owned by institutions decreased by 1.52% to 809K shares, which can influence price stability and market sentiment.

Institutional Activity Insights
The specific withdrawals from various ETF holdings such as PFF, PGX, GPRF, and PNARX reflect a cautious sentiment amongst these larger institutions. The percentage decreases in share ownership (PFF by 0.82%, PGX by 0.66%, and GPRF by 20.63%) further confirm this trend. While decreased participation and lower allocations often indicate potential concerns regarding the underlying financial health or expected performance of the stock, the initiation of a buy recommendation from Jefferies can counter some of this negativity. Nevertheless, investors should remain vigilant in analyzing these ongoing changes in institutional ownership.

Overall Impact and Conclusion
Despite the decline in ownership by multiple funds, the initiation of coverage by Jefferies with a buy recommendation could sway investor sentiment in a positive direction. However, caution is warranted due to the apparent exit of some institutional investors that may suggest underlying concerns. For a holding period of 1-3 months, this development interprets as slightly unfavorable due to diminished institutional confidence, but the buy recommendation introduces a potential for upside in the medium term.

Stocks: FHN