/Fifth%20Third%20Bancorp%20ban%20location%20by-Joe%20Hendrickson%20via%20iStock.jpg)
Fifth Third Bancorp (FITB), based in Cincinnati, Ohio, serves as the holding company for Fifth Third Bank, National Association. With a market cap of $31 billion, it offers diverse financial services, including retail and commercial banking, investment advisory, and data processing. The bank operates a network of 1,070 branches across the U.S.
Shares of the regional bank have substantially outperformed the broader market over the past year. FITB has gained 88.4% over this time frame, while the S&P 500 Index ($SPX) has surged 35.9%. In 2024, FITB stock is up 36.9%, compared to SPX’s 25.8% returns on a YTD basis.
Narrowing the focus, FITB’s outperformance is apparent compared to the iShares U.S. Regional Banks ETF (IAT). The exchange-traded fund has gained 64.5% over the past year. Moreover, FITB’s gains on a YTD basis compare to the ETF’s 31.6% returns over the same time frame.
On Jul. 19, shares of FITB gained 1.9% following its Q2 earnings release. The company’s revenue of $2.08 billion for the period missed the Wall Street estimates and declined 4.6% from a year ago.
While fee income reached high projections, and net interest income and loans aligned with forecasts, expenses were slightly above estimates, and non-performing loans rose by 13%, sparking some investor concerns. Despite this, FITB projects growth in net interest income and fees for Q4 2024 and plans to increase its share repurchases from $200 million in Q3 to $300 million in Q4. FITB anticipates 2025 to be a record year, with stable net interest income exiting 2024, assuming economic conditions remain steady.
For the current fiscal year, ending in December, analysts expect FITB to report an EPS decline of 6.2% to $3.33 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 22 analysts covering FITB stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and 11 “Holds.”
This configuration is less bullish than a month ago, with 11 analysts suggesting a “Strong Buy.”
On Oct. 21, Barclays PLC (BCS) raised its price target for Fifth Third Bancorp to $51 from $43, maintaining an “Overweight” rating after FITB’s earnings exceeded expectations.
The mean price target of $47.98 represents a 1.7% premium to FITB’s current price levels. The Street-high price target of $53 suggests an ambitious upside potential of 12.3%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
