BofA Securities reiterates Buy rating on Fifth Third Bancorp stock

On Monday, BofA Securities analysts reaffirmed their Buy rating for Fifth Third Bancorp stock (NASDAQ: NASDAQ:FITB), currently trading at $38.19 with a market capitalization of $25.5 billion, and maintained the price target at $44.00. The decision follows discussions with the bank’s leadership, including CEO Tim Spence, CFO Bryan Preston, and Investor Relations head Matt Curoe. According to InvestingPro analysis, the stock is currently trading near its Fair Value.

The meetings underscored a strategic emphasis on enhancing shareholder returns after a phase of underperformance by the stock. The management is focusing on positioning the bank for growth that surpasses nominal GDP levels. The bank maintains a strong dividend tradition, having paid dividends for 51 consecutive years with a current yield of 3.88%.

Fifth Third Bancorp is currently valued at 9.9 times its projected 2026 price-to-earnings ratio and 1.8 times its year-end 2025 estimated tangible book value, according to the analysts. This valuation presents an attractive risk/reward scenario, as outlined by the analysts.

The analysts have refined their earnings per share estimates for fiscal years 2026 and 2027 to $3.88 and $4.28, respectively, from previous estimates of $3.87 and $4.12. The Buy rating and $44 price target remain unchanged, reflecting optimism about the bank’s growth strategy.

In other recent news, Fifth Third Bancorp reported first-quarter 2025 earnings, with earnings per share (EPS) of $0.73, slightly surpassing the forecast of $0.71. However, the company’s revenue fell short of expectations, coming in at $2.14 billion against a projected $2.16 billion. Despite the revenue miss, Fifth Third anticipates a 5-6% increase in net interest income for the full year. Jefferies has initiated coverage on Fifth Third Bancorp with a Buy rating and a price target of $47, citing the bank’s growth prospects in loans and net interest income. Conversely, DA Davidson has adjusted its price target to $42 from $45, maintaining a Neutral rating due to a cautious economic outlook. Raymond (NSE:RYMD) James maintained a Market Perform rating after the bank’s first-quarter EPS exceeded estimates, attributing the positive surprise to lower provision expenses and reduced operating costs. Fifth Third’s strategic expansion in the Southeast and diversified fee income businesses are seen as positive factors, though challenges remain with lower noninterest income and increased nonaccrual loans.

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