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Investing.com - Stephens upgraded Fifth Third Bancorp (NASDAQ:FITB) from Equal Weight to Overweight on Tuesday, raising its price target to $52.00 from $49.00. The bank, currently valued at $27.89 billion, has shown strong momentum with a 24.16% gain over the past six months. According to InvestingPro analysis, the stock appears undervalued at current levels.
The upgrade follows Fifth Third’s acquisition of Comerica, which Stephens expects to be neutral to Fifth Third’s tangible book value and approximately 9% accretive to earnings per share by 2027.
The acquisition provides Fifth Third with entry into two new markets—Texas and California—for its branch model and the opportunity to leverage Comerica’s middle-market lending relationships.
Despite the positive outlook, Fifth Third shares have declined 3.6% and currently trade at 8.7 times 2027 earnings estimates. Stephens projects Fifth Third will achieve a peer-leading return on assets of 1.53% and return on tangible common equity of 20.5% by the fourth quarter of 2027.
Stephens cited Fifth Third’s "deep bench of executives" as providing confidence in the merger integration, while also noting the value of the bank’s $1 billion commercial payments platform. The firm expects Fifth Third to pause further bank acquisitions given the size and scope of the Comerica deal. Get access to comprehensive analysis and 8 additional exclusive InvestingPro Tips for Fifth Third Bancorp.
In other recent news, Fifth Third Bancorp has made significant strides in its mortgage business, originating over $5.2 billion in mortgages in 2025. This achievement places the bank among the top 45 lenders nationally and among the top 15 banks. Additionally, the bank reports a 31% higher customer retention rate for households with mortgages compared to checking-only customers. In a strategic move, Fifth Third announced its acquisition of Comerica Incorporated, prompting Moody’s Ratings to affirm Fifth Third’s ratings but change its outlook to negative. Meanwhile, Moody’s has placed Comerica’s ratings on review for a potential upgrade. Analyst firms have also reacted to the merger, with Keefe, Bruyette & Woods raising their price target for Fifth Third to $50, while Piper Sandler lowered it to $48, maintaining an Overweight rating. Morgan Stanley upgraded Fifth Third’s stock rating to Overweight, raising its price target to $60, citing benefits from the Comerica acquisition and increased earnings projections.
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