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Valued at $67.4 billion by market cap, U.S. Bancorp (USB) is a financial service holding company that provides banking and investment services to its customers. Based in Minneapolis, Minnesota, the company operates through the Wealth, Corporate, Commercial and Institutional Banking segments.
Shares of this bank holding company have underperformed the broader market over the past 52 weeks. USB has gained 17.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.1%. In 2024, shares of USB gained marginally, compared to SPX’s 16.5% return on a YTD basis.
Narrowing this focus, USB’s underperformance is also evident when compared to the US Regional Banks Ishares ETF’s (IAT) 29.4% gain over the past 52 weeks and 10.3% returns on a YTD basis.
U.S. Bancorp’s underperformance is primarily driven by increased provisions for credit losses and increased non-performing assets. However, the stock surged 4.6% on Jul. 17 following its Q2 earnings report, which surpassed Wall Street's top and bottom-line estimates. This was driven by an increase in net interest income, supported by healthy deposit growth, reduced expenses, and sustained momentum in using its diversified fee income platform to strengthen relationships.
Nevertheless, for the current fiscal year, ending in December, analysts expect USB’s EPS to decline 9.7% year over year to $3.89. The company’s earnings surprise history is promising. It beat or met the consensus estimates in each of the last four quarters.
Among the 23 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and 14 “Holds.”
This configuration is slightly less bullish than three months ago, with nine analysts suggesting a “Strong Buy.”
On Aug. 7, Barclays analyst Jason Goldberg maintained a “Buy” rating on U.S. Bancorp and set a price target of $52.
The mean price target of $49.75 represents a premium of 15.2% to USB’s current levels. The street-high price target of $58 implies a potential upside of 34.3% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
