Is Fifth Third Bancorp (FITB) overvalued?
On Equity Rank's model estimate, FITB trades 40% above its fair value. Fifth Third Bancorp (FITB) last closed at $53.04; the multi-method model fair value is $37.91.
| Price | Model fair value | Price vs model |
|---|---|---|
| $53.04 | $37.91 | 40% above |
What the answer rests on
- 1 of 12 valuation methods put FITB's value above its price and 11 put it below, so the methods mostly agree.
- To justify today's price, FITB's free cash flow would need to grow about 0.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -13.9% a year.
- FITB trades at 18.4 times its last year's earnings, against a median of 12.2 for 253 profitable Banks companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 20% above to 79% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind FITB's fair value · What prices assume · Other companies