FBR Capital Downgrades Fifth Third Bancorp (FITB) to Market Perform; Weaker Near-Term Outlook

FBR Capital downgraded Fifth Third Bancorp (NASDAQ: FITB) from Outperform to Market Perform with a price target of $20.00 (from $25.00) following Q4 results on a weaker near-term outlook.

Analyst Paul J. Miller, Jr. commented, "Our more negative outlook stems from our belief that rates will likely stay lower longer than is incorporated into broader management guidance, leading to flat to down revenues for the year. While some strength in fee income, driven by mortgage and other areas, could offset some of the associated margin and spread income pressure, we also believe higher operating expenses will lead to lower earnings year over year. This provides limited room for multiple expansion, in our view, despite management doing what is best for the business long term. Ultimately, we continue to believe Fifth Third is a well-managed institution relative to peers with significant
upside potential but find near-term possibilities for share appreciation limited. In conjunction with our rating downgrade, the incorporation of latest management guidance, and our more negative outlook on rates, we are lowering our FY15 EPS estimate to $1.60 from $1.80 and our FY16 EPS estimate to $1.70 from $2.00."

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 $17.53 yesterday.

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