UPDATE: ISI Group Initiates Coverage on Fifth Third Bancorp with Buy Rating, $21 PT on Current Buying Opportunity

In a report published Tuesday, ISI Group analyst Keith Murray initiated coverage on Fifth Third Bancorp FITB with a Buy rating and $21.00 price target. In the report, ISI Group noted, “We are initiating coverage of Fifth Third with a Buy rating and 12-month price target of $21. We think shares of Fifth Third currently offer an opportunity to buy a quality franchise (high and stable PPNR and returns) at a discount to peers and to the bank's return potential. Despite the mortgage and sluggish loan growth headwinds facing Fifth Third and other banks, we think FITB has a handful of levers that will help keep bottom line trends relatively stable in the near term (lower share count and credit costs) and show notable improvement in 2015. While Fifth Third is not overly asset sensitive, we think its rate sensitivity could increase if management grows the securities book. Bottom line, we think the combination of consistent and high PPNR/returns, a shrinking share count, a ~2.7% dividend yield, and low multiples will lead to increased investor optimism on the name over the next 12 months.” Fifth Third Bancorp closed on Monday at $17.77.