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Regional Bank Stock Named a Buy Before Earnings

FITB earnings are due out next week

Oct 14, 2019 at 10:19 AM
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Fifth Third Bancorp (NASDAQ:FITB) is trading lower early on despite bullish analyst attention. BofA-Merrill Lych just raised its opinion to "buy" from "neutral" despite trimming its price target by $1 to $30. This price target still sits near annual-high territory for the shares, which were last seen trading down 0.6% at $26.70.

At these levels, FITB is holding right below the 200-day moving average, with the 320-day moving average also hovering overhead, this latter trendline specifically acting as resistance on occasion in the past year. Not to mention, the equity's year-over-year breakeven mark also sits right near these key long-term moving averages.

Options traders have been betting bullishly on the regional lender. The stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 3.66, a reading that ranks in the 71st annual percentile. This shows there's been strong demand for call buying in recent weeks. We should also point out that peak open interest on Fifth Third Bancorp comes in at the October 31 call.

Most analysts remain bearish, though, with only six of 18 recommending to buy the shares. As such, if a breakout does happen, it could cause some of the skeptics to upgrade their positions. Looking ahead, the company is scheduled to report earnings before the open, next Tuesday, Oct. 22. 

 

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