Fifth Third Bancorp (FITB) Stock Rising on Branch Consolidation Plans

NEW YORK (TheStreet) --Shares of Fifth Third Bancorp (FITB) are higher by 2.42% to $21.55 in early afternoon trading on Monday, after the financial services company announced its plan to consolidate or sell approximately 100 branches and approximately 30 other purchased properties.

The bank said this initiative is intended to help "improve efficiency, competitiveness and the quality of its customers' experience."

Fifth Third Bancorp expects this program to be completed by the middle of next year.

"This plan reflects the continued progression of our work on providing an integrated customer experience. Meeting the evolving preferences of how our customers interact with us is our top priority. Over the past several years, we have made significant improvements to our mobile banking options and our sales and staffing models, and plan to tailor our branch network in concert with these changes," company CEO Kevin Kabat said in a statement.

Separately, TheStreet Ratings team rates FIFTH THIRD BANCORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate FIFTH THIRD BANCORP (FITB) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FITB's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 13.5% when compared to the same quarter one year prior, going from $318.00 million to $361.00 million.
  • Net operating cash flow has increased to $503.00 million or 47.94% 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 -37.14%.
  • The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 88.00%. Regardless of FITB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 22.56% trails the industry average.
  • FIFTH THIRD BANCORP has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FIFTH THIRD BANCORP reported lower earnings of $1.67 versus $2.01 in the prior year. For the next year, the market is expecting a contraction of 0.6% in earnings ($1.66 versus $1.67).
  • You can view the full analysis from the report here: FITB Ratings Report

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