Piper Jaffray Cuts Price Target on Fifth Third Bancorp (FITB) Following 4Q Earnings

Piper Jaffray reiterated a Neutral rating on Fifth Third Bancorp (NASDAQ: FITB), and cut the price target to $19.50 (from $22.00), following the company's 4Q earnings report. FITB's 2016 outlook calls for loan growth inline with that of nominal U.S. GDP growth of 2-3%. This outlook includes 2 additional rate hikes by the Fed (June & September) and assumes core expense growth of 4.5%-5% with a goal of mid to high 50%'s efficiency ratio.

Analyst Kevin Barker commented, "We maintain our Neutral rating and adjust our price target to $19.50 from $22.00 following the 4Q15 earnings release. We are also adjusting our FY16E EPS to $1.60 from $1.71 and FY17E EPS to $1.72 from $1.79 to take into account lower net interest income as we express a more dovish view on rates and higher operating expenses. FITB recently announced 2016 will be a "transition" year as FITB makes significant investments in technology, risk and compliance. While these investments are reflected in our lower numbers and the stock screens as attractive trading at 1.0x TBV or 10x FY16E EPS, we struggle to see incremental catalysts to drive outsized positive price performance in the near term, especially since we believe street estimates still need to come down."

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 $15.94 yesterday.

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