Fifth Third Earnings: Net Interest Income Likely Bottoms Soon, Shares Undervalued

No-moat-rated Fifth Third reported decent third-quarter earnings per share of $0.91, beating the FactSet consensus estimate of $0.82 and our estimate of $0.85. The outperformance was largely driven by lower provisioning, with net interest income, or NII, fees, and expenses all coming in close to our expectations. After factoring in these results and updated guidance from management, NII is trending toward the midrange of the bank’s previous guidance, flat fees are trending as expected, and expenses are trending toward the high end of the previous guidance range. These are minor differences, and we would describe current results as meeting expectations. Management now expects NII to trough in first-quarter 2024, better than some regional peers that don't have clarity yet on when their NII will bottom.