Stocks: With Kudos from Salomon, Fifth Third Shares Soar

Shares of Fifth Third Bancorp surged Friday on news of a glowing endorsement from Wall Street.

"They are the shining example of profitability in the banking industry," said Salomon Brothers analyst Michael Plodwick, who upgraded the Cincinnati banking company's stock to "buy" from "hold."

Mr. Plodwick set a 12-month target price of $75 to $77 per share. He also boosted his 1997 earnings estimate by 10 cents, to $3.75 per share, and increased his 1998 estimates by 15 cents, to $4.50 per share.

Fifth Third shares rose $3.50 to $68.25.

Mr. Plodwick said he upgraded the stock in part because he expects the bank will more aggressively repurchase shares from investors in the coming months. That would boost the bank's return on equity, already the highest among the regional banks Salomon covers.

Like most regional banks, Fifth Third stock slumped in December after reaching a 52-week high on Nov. 26. But Mr. Plodwick said the bank's pristine balance sheet and strong management put it in a good position to recover.

Fifth Third's fourth-quarter earnings contained no unpleasant surprises, he said. The bank's credit card portfolio is in "excellent shape," and its 41% efficiency ratio is the lowest in the industry, he added.

Mr. Plodwick said the bank has been wise and conservative in acquiring small banks in its area. He also said the bank's 15% annual growth rate since 1980 makes the stock an attractive investment at a time when analysts believe many regional bank stocks will start cooling off.

"They have a record of earnings growth that no other bank and few Fortune 500 companies can match," Mr. Plodwick said.

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