This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

PNC Is a 'Unique' Bank Stock Earnings Play: Analyst

Stocks in this article: FITBPNCTCBCRBCI:BKX

McEvoy on Monday also downgraded Fifth Third Bancorp to a "Perform" rating, from "Outperform," citing "outperformance in price," and the Federal Reserve's approval of the company's revised capital plan.

Fifth Third's shares closed at $15.31 Friday, returning 22% year-to-date, following an 11% decline during 2011.

The shares trade for 1.4 times tangible book value, and for 10 times the consensus 2013 EPS estimate of $1.58, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.60.

After the Federal Reserve in March only partially approved Fifth Third's annual capital plan, allowing the company to repurchase $1.4 billion in trust preferred securities and buy back common shares in amounts equal to after-tax gains from the sale of shares in Vantiv (VNTV), Fifth Third on Aug. 21 announced that the regulator had approved its revised capital plan, which "included the potential increase of the quarterly common stock dividend to $0.10 in the third quarter of 2012 and the potential repurchase of common shares."

Fifth Third's board of directors authorized the repurchase of up to 100 million common shares, including "potential common share repurchases of up to $600 million through the first quarter of 2013, in addition to any incremental repurchases related to any after-tax gains from the sale of Vantiv, Inc. stock."

McEvoy said that "solid loan growth across the company's Midwest footprint and an active mortgage banking environment have contributed to Fifth Third's above-peer profitability and stock price performance," but lowered his rating and rescinded his $17 price target for Fifth Third's shares, because "at this point we struggle to find the next company-specific catalyst to improve FITB's valuations."

As one of many large regional bank holding companies expected to see reduced earnings in 2013, McEvoy said "we feel Fifth Third could look to fill this earnings hole with a deal in the Midwest given their acquisitive history, which could limit multiple expansion," and that "potential targets may be TCF Financial (TCB) or Citizens Republic (CRBC)."

The analyst estimates that Fifth Third will earn $1.62 a share for all of 2012, followed by 2013 EPS of $1.55.

Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.

RELATED STORIES:



-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
3 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs