Story updated at 10 a.m. to reflect market activity.
Fifth Third fell -1.7% to $20.71 in morning trading.
The firm set a price target of $22 for the regional bank. BMO analysts Peter J. Winter, Lana Chan, and Oliver Brassard said Fifth Third is seeing some deterioration in core trends.
"Coming out of 1Q earnings, we feel that FITB's core trends are weaker than those of its regional bank peers, including weaker fee income and deterioration in credit quality for the second consecutive quarter," the analysts wrote. "In addition, FITB has experienced elevated levels of litigation reserve charges, which are negatively affecting expense trends and should continue in upcoming quarters."
Separately, TheStreet Ratings team rates FIFTH THIRD BANCORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIFTH THIRD BANCORP (FITB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins, good cash flow from operations, notable return on equity and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, FITB's share price has jumped by 35.29%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FITB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 90.86%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.76% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 529.05% to $768.00 million when compared to the same quarter last year. In addition, FIFTH THIRD BANCORP has also vastly surpassed the industry average cash flow growth rate of -85.68%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, FIFTH THIRD BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 1.3% when compared to the same quarter one year prior, going from $398.00 million to $403.00 million.
- You can view the full analysis from the report here: FITB Ratings Report