Diversified financial services company Fifth Third Bancorp (FITB) has reported better-than-expected results for the third quarter of 2021 on the back of robust revenue growth and lower credit losses.
The company’s third-quarter earnings surged 24% year-over-year to $0.97 per share, topping the Street estimates of $0.91 per share. Total revenue rose 7% to $2.03 billion and outpaced the consensus estimate of $1.98 billion. (See Fifth Third stock charts on TipRanks)
Net interest income increased 2% to $1.19 billion on lower deposit costs and a reduction in long-term debt. Net interest margin expanded 1 basis point to 2.59%. Also, fee income climbed 16% to $836 million, triggered by growth in all components.
The provision for credit losses was a net benefit of $42 million in the quarter, compared with $15 million in the prior year. The company reported total loans and leases of $107.9 billion, down 3% from the prior-year quarter. Meanwhile, total deposits grew 5% to $165.1 billion.
The Chairman and CEO of Fifth Third, Greg D. Carmichael, said, “We continue to focus on growing strong relationships and managing the balance sheet with a through-the-cycle perspective in order to generate sustainable long-term value.”
Last week, Jefferies analyst Ken Usdin maintained a Buy rating on Fifth Third and raised the price target to $51 from $45. The new price target implies 15.8% upside potential. (See Top Smart Score Stocks on TipRanks)
The rest of the Street is optimistic about the stock and has a Strong Buy consensus rating based on 6 Buys and 1 Hold. The average Fifth Third price target of $45.14 implies 2.5% upside potential.
FITB scores a 9 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to outperform market averages.