J.P. Morgan Reiterates Neutral Rating on Fifth Third Bancorp (FITB)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on Fifth Third Bancorp FITB; it has a $17.00 price target on the stock. The JPM analysts cited the company's recent earnings results, which were in-line with expectations, highlighted by lower credit-related expenses and weak revenues. This came from modest net interest margin (NIM) compression, slower loan growth, and lower noninterest income (albeit partly seasonal). The analysts noted that credit trends improved at a slower rate with lower nonperforming assets and past dues, but modestly higher net charge-offs. Excluding an accelerated TARP discount accretion of $0.17, core 1Q EPS of $0.27 was a penny above our and consensus estimates. As for valuation, the analysts remarked, “FITB is trading at 1.3 times tangible book value and 9.0 times our 2012 EPS – on both metrics, FITB is trading below the regional bank median, but in line with the mid-sized regional bank median on a P/TB basis. We are maintaining our December 2011 price target for Fifth Third of $17.00.”