Compass Point Lowers Price Target On Fifth Third Bancorp As Bumpy Ride Continues

In a report published Thursday, Compass Point analyst Kevin Barker reiterated a Neutral rating on

, but lowered the price target from $20.00 to $17.00. In the report, Compass Point noted, “We maintain our Neutral rating and lower our price target to $17 from $20 following the 4Q14 earnings release. FITB shares closed down 3.0% following the earnings announcement as estimated operating earnings of $0.37 per share missed the consensus estimate for $0.42 per share. While the stock appears to be cheap at 10.4x FY15E consensus EPS versus 12.2x for regional bank peers, we believe street estimates still have room to come down and the company will continue to face revenue and credit headwinds. We would expect these pressures to persist for the next several quarters and would wait till these declines are priced in before getting constructive on the stock. We are adjusting our FY15E EPS to $1.48 from $1.70 and our FY16E EPS to $1.60 from $1.86. Our EPS revisions were driven by the expectations for NIM compression in 2015 resulting from the loss of its deposit advance revenue, lower loan growth, and elevated operating expenses.” Fifth Third Bancorp closed on Wednesday at $17.53.