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U.S. Bancorp (USB)
:USB
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US Bancorp
(NYSE:USB)70Neutral
Positive Factors
CEO Transition
The CEO transition is viewed as an opportunity for the leadership team to hit reset and start the process of regaining investor confidence.
Stock Valuation
Stock valuation at 11x 2025 P/E vs. 12x peer median screens attractive for investors looking to add exposure to regional banks.
Negative Factors
Stock Performance
CEO transition announcement comes on the back of significant underperformance in USB shares, -17% over the last 3 years vs. +2% for the bank index.
US Bancorp (USB) vs. S&P 500 (SPY)
Market Cap
$69.67B
Dividend Yield4.43%
Average Volume (3M)9.07M
Price to Earnings (P/E)11.8
Beta (1Y)1.38
Revenue Growth5.59%
EPS Growth15.52%
CountryUS
Employees75,465
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)3.79
Shares Outstanding1,558,010,500
10 Day Avg. Volume9,627,339
30 Day Avg. Volume9,071,656
Financial Highlights & Ratios
PEG Ratio0.76
Price to Book (P/B)N/A
Price to Sales (P/S)2.78
Price to Cash Flow (P/CF)3.70
P/FCF Ratio2.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.29Price Target Upside30.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
US Bancorp Business Overview & Revenue Model
Company DescriptionU.S. Bancorp (USB) is a diversified financial services holding company headquartered in Minneapolis, Minnesota. It operates through its primary subsidiary, U.S. Bank National Association, offering a comprehensive range of financial services. These include consumer and business banking, wealth management, investment services, and payment services. With a strong presence in retail, commercial, and corporate banking, U.S. Bancorp serves millions of customers across the United States, providing tailored financial solutions to meet diverse needs.
How the Company Makes MoneyU.S. Bancorp generates revenue through several key streams. The primary source of income is interest earned from loans and credit products offered to individuals and businesses, including mortgages, personal loans, and commercial loans. Additionally, the company earns fees from payment processing services, such as merchant services and credit card transactions. Wealth management and investment services also contribute significantly, with fees from asset management, brokerage, and advisory services. U.S. Bancorp benefits from strategic partnerships with other financial institutions and businesses, which enhance its product offerings and expand its market reach, further contributing to its revenue.
US Bancorp Financial Statement Overview
Summary
US Bancorp maintains a solid financial foundation with stable income and prudent balance sheet management. While cash flow generation has improved, careful attention to operational metrics and investment activities is crucial to sustain growth. Continued focus on reducing leverage and optimizing capital expenditures will enhance financial resilience.Income Statement
US Bancorp has shown a consistent revenue stream with moderate fluctuations. The revenue decreased from $28.01 billion in 2023 to $27.34 billion in 2024. Net profit margin remained stable, with a slight increase in net income from $5.43 billion to $6.30 billion. However, EBIT and EBITDA figures are notably missing for 2024, impacting the comprehensive analysis of operational efficiency.70
Positive
Balance Sheet
The balance sheet reflects a stable equity base with stockholders' equity increasing to $58.58 billion in 2024. The debt-to-equity ratio has remained manageable, implying prudent leverage practices. However, the substantial total debt of $65.63 billion warrants close monitoring to mitigate financial risks.75
Positive
Cash Flow
US Bancorp exhibits a healthy operating cash flow of $11.27 billion in 2024, up from $8.45 billion in 2023, indicating improved cash generation capabilities. The free cash flow also increased, but the significant negative investing cash flow suggests substantial capital allocations that need to be evaluated for effectiveness.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 27.34B | 28.01B | 24.18B | 22.72B | 23.23B | Gross Profit |
| 27.34B | 28.01B | 24.18B | 22.72B | 23.23B | EBIT |
| 0.00 | 7.85B | 10.51B | 10.14B | 6.03B | EBITDA |
| 0.00 | 7.86B | 7.35B | 9.78B | 6.32B | Net Income Common Stockholders |
| 6.30B | 5.43B | 5.83B | 7.96B | 4.96B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 142.87B | 130.51B | 126.45B | 161.87B | 199.42B | Total Assets |
| 678.32B | 663.49B | 674.80B | 573.28B | 553.90B | Total Debt |
| 65.63B | 62.94B | 71.05B | 43.92B | 53.06B | Net Debt |
| 9.12B | 1.74B | 17.50B | 15.02B | -9.52B | Total Liabilities |
| 619.28B | 607.72B | 623.57B | 517.90B | 500.18B | Stockholders Equity |
| 58.58B | 55.31B | 50.77B | 54.92B | 53.09B |
| Cash Flow | Free Cash Flow | |||
| 11.27B | 8.45B | 21.12B | 10.53B | 4.27B | Operating Cash Flow |
| 11.27B | 8.45B | 21.12B | 9.87B | 3.72B | Investing Cash Flow |
| -24.53B | 18.93B | 7.50B | -57.49B | -15.44B | Financing Cash Flow |
| 8.57B | -19.72B | -3.98B | 13.94B | 51.90B |
US Bancorp Technical Analysis
Negative
44.72
Price Trends
47.53
Negative
48.52
Negative
45.13
Negative
Market Momentum
-0.84
Positive
36.64
Neutral
22.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USB, the sentiment is Negative. The current price of 44.72 is below the 20-day moving average (MA) of 46.35, below the 50-day MA of 47.53, and below the 200-day MA of 45.13, indicating a bearish trend. The MACD of -0.84 indicates Positive momentum. The RSI at 36.64 is Neutral, neither overbought nor oversold. The STOCH value of 22.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for USB.
US Bancorp Risk Analysis
US Bancorp disclosed 33 risk factors in its most recent earnings report. US Bancorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
US Bancorp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $677.44B | 12.27 | 17.28% | 1.98% | 17.07% | 21.78% | |
74 Outperform | $233.63B | 13.24 | 10.81% | 2.18% | 7.87% | 11.69% | |
73 Outperform | $132.78B | 11.85 | 6.04% | 3.14% | 8.20% | 49.26% | |
71 Outperform | $70.83B | 13.03 | 11.10% | 3.55% | 7.24% | 7.51% | |
70 Neutral | $69.67B | 11.81 | 11.00% | 4.43% | 5.59% | 15.52% | |
70 Neutral | $314.83B | 12.88 | 9.24% | 2.42% | 13.06% | 4.94% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
USB
US Bancorp
44.72
3.12
7.50%
BAC
Bank of America
41.40
6.38
18.22%
C
Citigroup
70.46
14.97
26.98%
JPM
JPMorgan Chase & Co.
242.28
58.20
31.62%
PNC
PNC Financial
179.77
32.37
21.96%
WFC
Wells Fargo
71.05
15.31
27.47%
US Bancorp Earnings Call Summary
Earnings Call Date: Jan 16, 2025 | % Change Since: -12.14% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted solid revenue growth, successful capital management, and improved operational efficiency. However, notable expense items, challenges in merchant acquiring, and uncertain loan growth present some concerns.Highlights
Strong Revenue Growth
Net revenue totaled $7 billion for the quarter and $27.5 billion for the year, driven by growth in net interest income and noninterest income. Achieved 190 basis points of positive operating leverage on an adjusted basis year-over-year.
Capital and Shareholder Returns
CET1 capital ratio increased 10 basis points to 10.6%. Tangible book value per share increased by 10.4% to $24.63. Initiated $100 million in share repurchases.
Positive Fee Income Trends
Fee income represented over 40% of total net revenue, with double-digit year-over-year fee growth in commercial products, trust and investment management, and investment product revenues.
Credit Quality and Capital Management
Improved credit quality with a modest loan loss reserve release. Nonperforming assets to loans ratio was stable at 0.48%, and net charge-off ratio remained flat at 0.60%.
Operating Efficiency
Delivered an 18.3% return on tangible common equity and improved efficiency ratio of 59.9% in the fourth quarter.
Lowlights
Notable Expense Items
Fourth quarter included $109 million of notable expense items, including $60 million related to operational efficiency initiatives and $49 million from lease impairments.
Challenges in Merchant Acquiring
Merchant acquiring yield contracted by 70 basis points year-over-year due to growth in higher volume, lower margin clients.
Uncertain Loan Growth
Modest loan growth expectations for 2025, with no immediate signs of significant pickup in lending demand.
Deposit Cost Pressures
Expected deposit betas to increase to mid- to high 40s in Q1 2025, with continued competitive pressures impacting deposit costs.
Company Guidance
During the U.S. Bancorp Fourth Quarter 2024 Earnings Call, executives provided detailed guidance focusing on several key financial metrics. The company reported a diluted earnings per share of $1.01, or $1.07 when adjusted for notable items, with net revenue reaching $7 billion for the quarter and $27.5 billion for the year. U.S. Bancorp highlighted a 190 basis point increase in positive operating leverage year-over-year on an adjusted basis, driven by effective balance sheet management and diversified fee business offerings. The CET1 capital ratio improved by 10 basis points to 10.6%, while the tangible book value per share increased by 10.4% to $24.63. For the first quarter of 2025, the company expects stable net interest income, excluding the impact of fewer days, and stable noninterest expenses around $4.2 billion. Full-year 2025 guidance anticipates total revenue growth of 3% to 5% on an adjusted basis, with positive operating leverage of greater than 200 basis points. The company remains focused on prudent expense management, asset repricing benefits, and modest capital distributions, including an initial $100 million in share repurchases.US Bancorp Corporate Events
Executive/Board ChangesShareholder Meetings
US Bancorp Announces Leadership Changes for 2025
Neutral
Jan 31, 2025
Shailesh M. Kotwal will retire as Vice Chair, Payment Services at U.S. Bancorp on February 3, 2025, but will continue in an advisory role until June 30, 2025, to support the transition of the Payments business leadership. Scott W. Wine has announced his decision not to seek re-election to the Board of Directors at the Company’s 2025 Annual Meeting for personal reasons, having served for ten years without any disagreements with the company.
Executive/Board ChangesBusiness Operations and Strategy
U.S. Bancorp Names Gunjan Kedia as New CEO
Positive
Jan 28, 2025
On January 28, 2025, U.S. Bancorp announced the election of Gunjan Kedia as its new President and CEO, effective April 15, 2025. She succeeds Andrew Cecere, who will continue as Executive Chairman. Kedia has been with U.S. Bancorp since 2016 and brings nearly 30 years of experience in financial services, having previously held executive roles at State Street Financial and BNY. Her leadership is expected to guide the company towards a future of growth while maintaining its core values. Under Cecere’s tenure, the company expanded its technological capabilities and grew its presence, notably through a significant merger with Union Bank. The leadership transition signifies continuity and strategic growth for U.S. Bancorp.
Business Operations and StrategyFinancial Disclosures
U.S. Bancorp Reports Strong Q4 2024 Financial Results
Positive
Jan 16, 2025
U.S. Bancorp will hold an investor conference call on January 16, 2025, to discuss the financial results for the quarter ending December 31, 2024. In the fourth quarter of 2024, U.S. Bancorp reported a net income of $1,745 million and a diluted earnings per share of $1.07, adjusted for notable items. The company’s return on tangible common equity was 18.3% and the CET1 capital ratio was 10.6% at year-end. The company highlighted strong year-over-year growth in commercial products and trust and investment management fees, alongside stable credit quality. U.S. Bancorp’s diversified business model has positioned it well for future growth and industry-leading returns.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.