Rating Change #7

Fifth Third Bancorp ( FITB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 75.5% when compared to the same quarter one year prior, rising from $192.00 million to $337.00 million.
  • 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. Along with this, the net profit margin of 19.80% is above that of the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
  • In its most recent trading session, FITB has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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 10.3, below the average banking industry P/E ratio of 10.4 and below the S&P 500 P/E ratio of 17.7. Fifth Third has a market cap of $9.6 billion and is part of the financial sector and banking industry. Shares are down 27.7% year to date as of the close of trading on Thursday.

You can view the full Fifth Third Ratings Report or get investment ideas from our investment research center.

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