Analyst Update: Capital One Financial Corp., Zions Bancorp, and Fifth Third Bancorp

Analysts are weighing in on Capital One Financial Corp. (COF), Zions Bancorp (ZION), and Fifth Third Bancorp (FITB)

Nov 16, 2016 at 3:16 PM
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U.S. stocks are mixed, with tech stocks moving higher while banks drag down blue chips. In fact, among the stocks in focus today are finance concerns Capital One Financial Corp. (NYSE:COF), Zions Bancorp (NASDAQ:ZION), and Fifth Third Bancorp (NASDAQ:FITB). Here's a quick roundup of today's brokerage notes on COF, ZION, and FITB.

  • COF is trading lower, down 2.9% at $79.74, as the finance sector pulls back from its post-election rally, and after comments on "too big to fail" banks from Minneapolis Fed President Neel Kashkari. Capital One Financial Corp. was downgraded to "neutral" from "outperform" by Baird, which also raised its price target to $82 from $78. "Investors should book gains and wait for more evidence that the structural improvement in macro trends and regulations will materialize," the analysts wrote about U.S. banks -- including Bank of America Corp (NYSE:BAC). COF has been on a steady trajectory of higher highs since early July, and notched an annual high of $82.15 on Tuesday. Today's pullback may have been in the cards for COF, however, given that its 14-day Relative Strength Index (RSI) sat at 70 as of Wednesday's close, which is in "overbought" territory.

  • ZION is also pulling back after a red-hot rally, shedding 3.6% to trade at $37.38. Bernstein weighed in on Zions Bancorp, downgrading the stock to "market perform" from "outperform," while lifting its price target by $1 to $38. In addition, ZION was downgraded to "equal weight" from "overweight" at Morgan Stanley, which also cut its view on the entire financial industry to "cautious." ZION still sits up 36.8% year-to-date, and tapped an post-financial-crisis high of $38.87 on Tuesday. A handful of option traders are likely cheering today's decline, with ZION's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing 6.35 puts bought to open for every call option over the last two weeks, a reading that sits higher than 70% of its annual range.

  • FITB is also falling on negative analyst attention, currently trading 2.9% lower at $24.93. Fifth Third Bancorp received a downgrade to "underperform" from "neutral" by Baird, which hiked its price target to $21 from $19, while Bernstein cut its opinion on the bank stock to "market perform" from "outperform," and raised its price target to $26 from $23. FITB tapped an eight-year high of its own just yesterday, and despite today's pullback, still sits up over 24% so far in 2016. In the option pits, FITB's Schaeffer's put/call open interest ratio (SOIR) of 1.93 sits in the 100th percentile of its annual range, suggesting short-term option players haven't been more put-skewed in the past 12 months.
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