#6 - Fifth Third Bancorp (NASDAQ:FITB)
Prior to the March sell-off, Fifth Third Bancorp (NASDAQ: FITB) was off to a great start in 2023. FITB stock was up approximately 10% and analysts believe that the stock could climb to $40.90 which would be a 63% upside from its current price.
The bullish argument comes down to a critical metric for banks. That is tangible book value per share. Like many banks, Fifth Third had to buy some bonds to sop up its excess liquidity while loan demand was light. The bank designates the vast majority of those bonds as available-for-sale (AFS). That means the bonds are marked to market each quarter. In a rising interest rate environment, that means the bonds are bookd as an unrealized loss every quarter.
But just because the bank can sell the bonds doesn’t mean it will. And as long as the bank has no liquidity issues, it’s likely to recoup its losses when it holds the bonds to maturity.
About Fifth Third Bancorp
Fifth Third Bancorp operates as the bank holding company for Fifth Third Bank, National Association that engages in the provision of a range of financial products and services in the United States. It operates through three segments: Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management.
Read More - Current Price
- $42.42
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $45.92 (8.2% Upside)
