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Investing.com - DA Davidson has reiterated its Buy rating on Fifth Third Bancorp (NASDAQ:FITB) with a price target of $47.00, according to a research note released Friday. Currently trading at $42.45, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $43 to $52.
The firm maintained its positive outlook despite noting that Fifth Third’s management has indicated loan growth will likely moderate in the second half of 2025 and has tempered full-year fee income growth expectations, prompting DA Davidson to slightly lower its earnings per share forecasts.
DA Davidson highlighted that Fifth Third’s management remains committed to delivering 150 to 200 basis points of positive operating leverage, even without a recovery in capital markets, citing strong first-half 2025 performance and several expense reduction options available to the bank.
The research note pointed out that Fifth Third is on track to achieve record net interest income even without additional loan growth or interest rate cuts from the Federal Reserve.
Credit quality at the bank has improved, with non-performing loans declining after three consecutive quarters of increases, which further supported DA Davidson’s decision to maintain both its Buy rating and $47 price target on the stock.
In other recent news, Fifth Third Bancorp reported its second-quarter 2025 financial results, surpassing Wall Street’s expectations. The company achieved an earnings per share (EPS) of $0.88, slightly above the forecasted $0.87, and exceeded revenue projections with $2.25 billion compared to the expected $2.22 billion. Despite this positive performance, the company’s stock experienced a minor decline in pre-market trading. Fifth Third Bancorp also announced plans to expand its branch network, aiming to open 40 additional branches in the Southeast by the end of the year. Furthermore, the company anticipates a full-year increase in Net Interest Income (NII) of 5.5% to 6.5% and plans to resume share repurchases in the third quarter, projecting $400-500 million in stock repurchases for the rest of 2025. Analyst discussions during the earnings call highlighted Fifth Third’s proactive approach to navigating emerging financial trends and regulatory landscapes. The bank’s CEO, Tim Spence, emphasized the company’s resilience and strategic focus on organic growth and shareholder returns.
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