Neutral on Fifth Third Bancorp: Modest Earnings Upside but Limited Valuation Appeal Amid CMA Integration Uncertainty

In a report released yesterday, Keith Horowitz from Citi maintained a Hold rating on Fifth Third Bancorp, with a price target of $50.00.

Keith Horowitz has given his Hold rating due to a combination of factors surrounding Fifth Third Bancorp’s earnings outlook and valuation. He anticipates a modest beat for the upcoming quarter, driven by slightly firmer net interest income and tighter expense management, but believes investor attention will quickly pivot to 2026 guidance and management’s commentary on the integration and trajectory of the CMA acquisition. On a core basis, he projects 2026 EPS growth of about 9% year over year and sees additional upside into 2027 as expense synergies are realized, though he intentionally models more conservative cost savings than management’s stated target.

At the same time, Horowitz views management’s ambition for a return on tangible common equity above 19% as somewhat optimistic, and instead incorporates an 18% normalized ROTCE into his valuation framework. With the shares trading roughly in line with the broader peer group on his implied cost-of-equity measure, he does not see a compelling valuation discount that would justify a more constructive stance. Given that the CMA deal clouds near-term comparability to consensus expectations and that he sees a more attractive risk/reward profile in other bank stocks, he prefers to remain neutral on Fifth Third until the post-acquisition earnings path becomes clearer.

In another report released on December 17, KBW also maintained a Hold rating on the stock with a $53.00 price target.

Based on the recent corporate insider activity of 62 insiders, corporate insider sentiment is neutral on the stock.