Friday, Credit Suisse initiated coverage of Fifth Third Bancorp (FITB) stock with an Outperform rating and a price target of $15. The brokerage established its 2009 fourth quarter loss per share estimate of $0.44, and its 2010 loss estimate of $0.68.
Analyst Siegenthaler believes the FITB stock provides the highest risk-adjusted upside potential in his regional bank universe. The analyst forecasts $1.75 of normalized EPS and apply a normalized PE multiple of 12-14 times, implying that the stock could trade up to the low twenties (140% to 145% potential upside) over the next three years (34% annualized).
Additionally, the analyst sees downside as limited given that he estimates trough "stressed" tangible book value to be $7.10 which is 25% below the current stock price (if he increased his NCO forecast by 50%).
Specifically, the analyst believes that given FITB's high reserve levels: the company would be able to reduce reserves in 2010 - 2012, benefiting both capital levels and EPS, FITB's capital ratios are understated vs. peers, and that even if he increased his 2010 net charge-off forecast by 50%, FITB will remain adequately capitalized as its trough Tier 1 Common ratio would still be 220bps higher than the regulatory threshold.
The analyst would look for the Y-9C filing, to be released by November 15, as the next catalyst for FITB. The filing will offer greater granularity on delinquency and loss trends by loan mix.
Currently, FITB is up $0.25 or 2.62% and trading at $9.79.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.