Stephens Downgrades Fifth Third Bancorp (FITB) to Equal Weight, 'Valuation Should Hold'

Stephens analyst Terry McEvoy downgraded Fifth Third Bancorp (NASDAQ: FITB) from Overweight to Equal Weight with a price target of $41.00.

The analyst comments "Several factors have contributed to shares of FITB outperforming peers in recent years, most notably the company's ROTCE moving from the lower quartile in 2018 to the upper quartile last year (same for ROA and efficiency ratio). Since 2014, Fifth Third's quarterly results have exceeded consensus expectations 74% of the time, with an average beat of ~6%. Low levels of CRE loans have also helped sentiment. At a recent industry conference, management commented positively on 1Q24 results, removing a near-term catalyst. Following the successful re-rating of FITB valuation over the last decade, shares are at a healthy premium (9.8x 2025 EPS and 2x TBV). We feel Fifth Third will maintain its fundamental ranking among peers but see less upside in price and are lowering our rating to EW from OW. Investors are curious about how M&A may support organic initiatives and the company's down rate deposit beta expectation."

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 $35.77 yesterday.

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