Fifth Third Bancorp "neutral," target price reduced

01/19/04 - Robert W. Baird

NEW YORK, January 19 (New Ratings) - Analysts at Robert W Baird reiterate their "neutral" rating on Fifth Third Bancorp (FITB), while revising their estimates for the company. The target price has been reduced from $63 to $62.

Shares of Fifth Third Bancorp, an $89 billion financial holding company, are currently trading at $57.96.

According to Robert W Baird research note published on January 16, Fifth Third Bancorp’s stock could see an upward trend in view of the company’s ability to perform better than its peers. The company’s EPS growth is likely to decline in FY04 on the expectations of low operating revenues, the analysts mention. This could restrict the premium on the company's stock price, the analysts point out.

The company’s 4Q EPS of $0.80 includes a pre-tax gain of $62 million from the sale of its corporate trust business, the analysts mention. The gain was, however, partially offset by the one-time charge of $0.03-$0.04, according to Robert W Baird. The company’s 2003 EPS of $3.04 was 10% higher that the 2002 level, the analysts mention. The charge-offs are expected to decline in 2004, the analysts believe.

The EPS estimate for 2003 has been raised from $3.02 to $3.04, while the EPS estimate for 2004 has been reduced from $3.36 to $3.30. The P/E estimates for 2003 and 2004 are 19.1x and 17.6x, respectively.

Robert W Baird reiterates its "neutral" rating on Fifth Third Bancorp.