FITB: Model Update: Adjusting Earnings Estimates

研报英文原文证据摘录

FITB: Model Update: Adjusting Earnings Estimates

Fifth Third Bancorp

Target/Upside/Downside Scenarios Investment summary

• Comerica Incorporated (CMA) Acquisition: FITB closedFifth Third Bancorp

on its CMA acquisition on February 1. The acquisition is

65 125 Weeks 06FEB24 - 26JUN26 a strategic acceleration of FITB’s long-term growth plan,

60 TARGETTARGET 57.0057.00 enhancing scale, profitability, and geographic reach. We

55 CURRENTCURRENT 56.3156.31 expect the combination to be immediately accretive to

50 shareholders; deliver peer-leading efficiency, return on

40 assets and return on tangible common equity ratios; and

35 create a compelling platform to generate sustainable long-

30 term growth.

25 • Basic bank “Blocking and Tackling” drives organic growth:

150m Since 2018, FITB has expanded its footprint with de novo

100m

50m branch openings in the Southeast (the company expects to

2024 2025 2026 F M A M J J A S O N D J F M A M J J A S O N D J F M A M J open 60 new branches in the Southeast in 2026.) Further,

FITB US Rel. S&P 500 COMPOSITE MA 40 weeks separate from the CMA acquisition, FITB has augmented

Source: Bloomberg and RBC Capital Markets estimates for Target its organic growth with the recent agreement to acquire

Valuation Mechanics Bank’s Fannie Mae Delegated Underwriting and

Our price target of $57 is 13.9x our 2026 EPS estimate, 1.53x Servicing (DUS) business line. The acquisition, expected

1Q27E book value, and 2.30x 1Q27E tangible book value. to close in early 2026, grants Fifth Third direct access to

These multiples are consistent with being the highest-quality the Fannie Mae program, allowing them to independently

bank in the peer group. Our price target primarily reflects our underwrite, close, and service multifamily housing loans.