Both names tagged two-year lows near the start of the shutdown
The partial U.S. government shutdown has entered day 19, with President Donald Trump and congressional leaders expected to meet today to resume funding negotiations. This follows POTUS' prime-time address to the nation last night and a tweet from Trump this morning that said, "we MUST fix our Southern Border!" With no end in sight, financial firms Fifth Third Bancorp (NASDAQ:FITB) and Zions Bancorp (NASDAQ:ZION) are worth watching, considering they've been two of the best stocks to own during a government shutdown.
Citigroup Turns Bullish on Fifth Third Stock
According to Schaeffer's Senior Quantitative Analyst Rocky White, Fifth Third stock has been positive one month after a shutdown begins 92% of the time, going back to 1981, with an average gain of 5.1%. The shares bottomed at a two-year low of $22.12 on Dec. 26 -- the second trading day of the current shutdown -- but have since bounced 13% to trade at $25.00, and are back above their 30-day moving average.
Analysts are certainly paying attention to FITB, with Citigroup resuming coverage on the stock with a "buy" rating and $29 price target. And while UBS lowered its price target on the equity to $26 from $30, the brokerage firm said bank shares could appreciate this year on a lack of negative catalysts. More broadly, roughly three-quarters of covering analysts rate Fifth Third a "hold," while the average 12-month price target sits at $29.79.
Analysts, Options Traders Upbeat Toward Zions Stock
Zions Bancorp has also been positive 92% one month after a shutdown begins, boasting an average positive return of 3.33%. The bank stock skimmed $38.08 on Dec. 26 -- its lowest mark since November 2016 -- but has since added 13.8% to trade at $43.34, and is pacing toward its fourth straight daily win today. This rebound has the shares trading near the $43.25-$43.50 region, home to a mid-December bear gap and ZION's 30-day moving average.
In the options pits, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 8,075 calls in the last two weeks, compared to just 82 puts. The bulk of this activity appears to be centered at the January 2019 45-strike call, where it looks like one trader last Friday rolled their long January 2019 42-strike calls up.
This optimism is seen among the brokerage bunch, too, with 12 of 18 analysts maintaining a "strong buy" recommendation on ZION, and not a single "sell" on the books. Plus, the consensus 12-month price target of $54.61 is a 25.19% premium to current trading levels.