US Bancorp: Compelling Risk/Reward on Mispriced Valuation, Operating Leverage, and Improving Margins Justify Buy Rating

In a report released yesterday, Keith Horowitz from Citi maintained a Buy rating on US Bancorp, with a price target of $70.00.

Keith Horowitz has given his Buy rating due to a combination of factors pointing to attractive upside in both earnings and valuation. He expects US Bancorp to deliver about 5% year-over-year revenue growth in 2026, underpinned by balanced expansion in both net interest income and fee-based businesses. His projections assume tight expense discipline, with operating costs rising only around 2% and thereby creating meaningful operating leverage versus consensus expectations. He also anticipates net interest margins to improve into 2026 and sees additional room for margin gains beyond that period, even if results come in slightly below management’s long-term targets.

Horowitz’s outlook on credit quality is more favorable than the market’s, as he assumes net charge-offs will remain contained, supporting stable earnings power. He believes the current market expectations are conservative, leaving scope for upside as management continues to post “proof” quarters that validate its guidance. Furthermore, he highlights that US Bancorp’s shares trade at one of the steepest discounts in his coverage when judged against his implied cost-of-equity measure, indicating the stock is mispriced relative to its risk profile. Combined with an expected share price return in the high 20% range over the near term, these elements lead him to view the risk/reward as compelling and justify his Buy recommendation.

In another report released on December 18, Oppenheimer also maintained a Buy rating on the stock with a $75.00 price target.

Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of USB in relation to earlier this year.