Morgan Stanley analyst Manan Gosalia upgraded the rating on Fifth Third Bancorp to a Buy today, setting a price target of $60.00.
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Manan Gosalia has given his Buy rating due to a combination of factors that highlight the strategic benefits of Fifth Third Bancorp’s recent acquisition of Comerica (CMA). The acquisition is seen as a strong strategic fit, providing Fifth Third Bancorp with a significant presence in high-growth markets like Texas, which allows the company to expand its retail offerings effectively. This strategic move is expected to enhance earnings, with an anticipated 12% increase in 2027 earnings per share (EPS) to $5.24, surpassing the company’s own guidance of a 9% increase.
Furthermore, Gosalia notes that the acquisition will likely result in revenue synergies, such as improved cross-selling opportunities and enhanced branch productivity within the CMA footprint. These factors contribute to a more optimistic outlook for Fifth Third Bancorp, leading to an increased price target of $60, which implies a 37% upside. Despite some execution risks associated with such a large deal, the analyst remains confident in the potential for additional cost savings and revenue growth, supported by a favorable regulatory environment that aims to expedite deal approvals.
In another report released on October 3, Wells Fargo also maintained a Buy rating on the stock with a $52.00 price target.
Based on the recent corporate insider activity of 62 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FITB in relation to earlier this year.