NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year, impressive record of earnings per share growth, notable return on equity and compelling growth 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 ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Banks industry and the overall market, FIFTH THIRD BANCORP's return on equity is below that of both the industry average and the S&P 500.
- FITB, with its decline in revenue, slightly underperformed the industry average of 1.2%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- FIFTH THIRD BANCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIFTH THIRD BANCORP reported lower earnings of $0.61 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.61).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 82.70%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, FITB's net profit margin of 19.80% significantly trails the industry average.
Fifth Third Bancorp operates as a diversified financial services holding company in the United States. The company's Commercial Banking segment offers banking, cash management, and financial services to large and middle-market businesses, and government and professional customers. The company has a P/E ratio of 15, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. FIFTH THIRD BANCORP has a market cap of $11.3 billion and is part of the
industry. Shares are down 13.1% year to date as of the close of trading on Friday.
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