Nomura Securities Starts Fifth Third Bancorp (FITB) at Neutral

February 6, 2013 8:26 AM EST
Get Alerts FITB Hot Sheet
Price: $26.10 +0.27%

Rating Summary:
    11 Buy, 21 Hold, 5 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 11 | Down: 20 | New: 54
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Nomura Securities initiates coverage on Fifth Third Bancorp (NASDAQ: FITB) with a Neutral. PT $17.00.

Analyst Keith Murray comments, "We expect Fifth Third to show stable trends in 2013 with flattish NII and expenses, a modest pickup in core fee revenue, and a solid 115bps ROA. All this leads to positive operating leverage of 100bps in our model, in line with consensus. The stock is trading in line with peers on P/B and is at a discount on P/E, but we see limited multiple expansion because of meager EPS growth and the boost from capital returns is already baked into consensus estimates, which call for a 70% combined payout ratio. Fifth Third has a solid capital position with an 8.8% Basel III T1C ratio, which places it at the upper end of its bank peers. The bank continues to see improving credit trends and NPAs were down 12% QoQ in 4Q12. We expect Fifth Third’s credit improvement to continue and more reserve releases to come. FY13E EPS at $1.61; FY14E EPS at $1.7."

For an analyst ratings summary and ratings history on Fifth Third Bancorp click here. For more ratings news on Fifth Third Bancorp click here.

Shares of Fifth Third Bancorp closed at $16.51 yesterday.

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