Rising expenses denting earnings growth create a murky near-term setup for shares of First Horizon , according to JPMorgan Chase. Analyst Steven Alexopoulos moved to a neutral rating on the regional bank stock after a nonrating period, saying the company’s recent investor day failed to improve near-term confidence. The Wall Street firm previously held an overweight rating on shares and a $20 price target. “With expense growth to remain elevated in 2023/2024, deposit costs continuing to rise, fee income acting as a headwind particularly if the Fed doesn’t pivot, and the absence of a near-term catalyst, we move to Neutral,” he wrote in a Tuesday note to clients. Shares of First Horizon faced significant pressure this year as the regional banking crisis unraveled and led to the collapse of Silicon Valley Bank and Signature Bank, and the takeover of First Republic. Amid this backdrop, the stock has tumbled nearly 52%, with the firm’s $13 price target suggesting 10% upside from Monday’s close. Looking ahead, Alexopoulos is bracing for significant near-term headwinds to the company’s bottom line given an elevated expense growth rate ranging between 6% and 8% as the company invests in talent and technology. He also called the company’s balance sheet growth a “bit of a wildcard” following commentary from its CEO at its recent investor day. FHN YTD mountain First Horizon shares tumble “Should a recession emerge, with the Fed potentially limited in its ability to lower interest rates, which is the fuel to the countercyclical businesses, the company will likely see much less benefit in terms of historical buffering capabilities,” Alexopoulos said. He also views the company’s $100 billion asset threshold milestone from $81 billion at the end of the first quarter as a potential obstacle given new standards under discussion for regulating the banking system. — CNBC’s Michael Bloom contributed reporting.