Attractive P/E Ratio
Reasonable Price-to-Sales Ratio
Strong Net Profit Margin
Healthy Return on Equity
Low Debt-to-Equity Ratio
🏦 Strong Financial Performance
🌍 Diversified Business Mix
📈 Strong Loan Growth and Credit Management
🚀 Optimistic Growth Outlook
📊 Strategic Investments and Expansion Plans
💻 Innovation in Services
High EV/EBITDA Ratio
Moderate Operating Profit Margin
Weak Liquidity Ratios
Low Interest Coverage
⚠️ Labor Market Challenges
Fifth Third Bancorp demonstrates strong business quality through solid financial performance, a diversified business model, and effective risk management. Looking forward, the bank has optimistic growth prospects supported by strategic investments, but faces challenges related to labor market conditions that may impact loan demand.
Analysis Date: January 21, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$130.60
Current Market Price: $33.05
IV/P Ratio: 3.95x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
75.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for FITB
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (9.95)
P/B ratio ≤ 1.5 (1.17)
Current ratio ≥ 2.0
Long-term debt < Net current assets
Margin of safety (75.0%)
FITB does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The net profit margin of 21.33% demonstrates effective cost management and a solid ability to generate profit from revenues.
A return on equity (ROE) of 11.77% indicates good performance in generating profits from shareholders' equity.
The operating profit margin of 19.76% is reasonable but may suggest room for improvement in operational efficiency.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
11.77%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.29%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
112.03%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
21.33%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The debt-to-equity ratio of 0.94 indicates a relatively low reliance on debt for financing, suggesting a conservative capital structure.
The current ratio, quick ratio, and cash ratio are all at 0.0, indicating potential liquidity issues that could affect short-term financial stability.
With an interest coverage ratio of 0.45, the company may struggle to meet interest obligations, raising concerns about financial stability.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.94x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
FITB: No data available
Fifth Third Bancorp reported earnings per share of $0.85, exceeding previous guidance, with an adjusted return on equity of 13.7%, the highest among peers. The bank achieved a core adjusted pre-provision net revenue (PPNR) exceeding $1 billion and an adjusted efficiency ratio improving to 54.7%. These metrics demonstrate strong operational efficiency and profitability.
The bank's growth strategies focus on expanding its Southeast branch footprint and enhancing its momentum banking platform, leading to a 2.3% year-over-year household growth and significant retail deposit growth. This diversification helps in building competitive advantages and a resilient business model.
Fifth Third has shown balanced loan growth across consumer and commercial segments, with a 3% increase in loans sequentially. The bank maintains a diversified credit portfolio with proactive management of risks, evidenced by a stable non-performing assets (NPA) ratio.
The bank anticipates achieving record net interest income (NII) in 2025, with an expected increase of 5% to 6%. Positive macroeconomic indicators and a favorable interest rate environment set the stage for continued growth.
Fifth Third plans to open 60 new branches in the Southeast in 2025 and has increased its middle market relationship manager headcount by 25%. These investments are expected to drive further market share gains and revenue growth.
The bank's focus on technology innovation, particularly in its Commercial Payments and Wealth Management segments, is expected to enhance client acquisition and retention, leading to higher fee income.
Concerns about labor availability are prominent among middle market clients, potentially impacting loan demand. The bank's clients are facing structural issues within the labor market, which may hinder growth if not addressed.