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US Bancorp (USB)
NYSE:USB
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US Bancorp
(NYSE:USB)
Rating:70Outperform
Price Target:
$48.00
▲(9.89%Upside)
Positive Factors
Financial Performance
USB shares outperformed expectations with stronger fee income and lower credit costs, leading to revised earnings estimates and a higher price objective.
Leadership
The new CEO's urgency to improve performance is a positive signal for potential turnaround.
Operational Efficiency
Operating leverage outpaced guidance, indicating strong operational efficiency.
Negative Factors
Economic Uncertainty
The reserve release was surprising, partially offset by increased economic uncertainty.
Investor Sentiment
USB shares are trading below the levels they did 10 years ago, indicating investor skepticism about the company's future performance.
Stock Valuation
Stock valuation reflects investor skepticism.
US Bancorp (USB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.15B
Dividend Yield4.53%
Average Volume (3M)7.36M
Price to Earnings (P/E)11.0
Beta (1Y)1.25
Revenue Growth2.19%
EPS Growth34.00%
CountryUS
Employees70,000
SectorFinancial
Sector Strength83
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.03
Shares Outstanding1,558,027,600
10 Day Avg. Volume6,243,025
30 Day Avg. Volume7,360,240
Financial Highlights & Ratios
PEG Ratio0.66
Price to Book (P/B)1.13
Price to Sales (P/S)0.00
P/FCF Ratio11.08
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$50.81Price Target Upside16.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
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 principal subsidiary, U.S. Bank National Association, and offers a wide range of financial products and services in the sectors of consumer and business banking, corporate and commercial banking, wealth management, and payment services. The company serves individuals, businesses, nonprofit organizations, government entities, and financial institutions primarily in the United States.
How the Company Makes MoneyU.S. Bancorp generates revenue through several key streams, including interest income from loans and leases, fees from payment services, and wealth management and investment services. Interest income is primarily derived from consumer, commercial, and real estate loans, as well as credit card operations. The bank also earns significant revenue from non-interest income sources such as transaction fees from merchant processing, card issuing, and ATM services. Wealth management fees, including those from investment advisory and asset management services, contribute to its earnings. Moreover, U.S. Bancorp benefits from strategic partnerships and a diversified customer base, enhancing its profitability and financial stability.
US Bancorp Earnings Call Summary
Earnings Call Date:Apr 16, 2025
(Q1-2025)
| % Change Since: 13.07%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with notable achievements in operating leverage, credit quality, and diversified fee income. However, challenges remain in net interest income growth, loan growth, and consumer spending sentiment.Q1-2025 Updates
Positive Updates
Earnings Per Share and Return on Tangible Common Equity
U.S. Bancorp reported earnings per share of $1.03 and a return on tangible common equity of 17.5% for the first quarter of 2025.
Positive Operating Leverage
The company achieved year-over-year positive operating leverage of 270 basis points on an adjusted basis, marking the third consecutive quarter of revenues outpacing expenses.
Strong Credit Quality and Capital Levels
Net charge-off ratio improved modestly, with a CET1 capital ratio increase of 20 basis points to 10.8%, and a tangible book value per share up 13.8% year-over-year.
Diversified Fee Income
Fee income represents 41% of total net revenue, supported by strong performance in trust and investment management, and capital markets fee businesses.
Negative Updates
Flat to Declining Net Interest Income
Net interest income on a fully taxable equivalent basis totaled $4.12 billion, relatively stable compared to the previous quarter, with some impact from lower short-end rates.
Modest Growth in Average Loans
Average loans increased by a modest 0.9% on a linked quarter basis, indicating challenges in achieving higher growth rates.
Consumer Spending Concerns
There was a modest pullback in consumer spending early in the year due to weather-related factors, with ongoing concerns about consumer sentiment.
Company Guidance
During the U.S. Bancorp First Quarter 2025 Earnings Conference Call, the company provided several key metrics and forward-looking guidance. For the first quarter, U.S. Bancorp reported earnings per share of $1.03 and a return on tangible common equity of 17.5%. The firm achieved a year-over-year positive operating leverage of 270 basis points on an adjusted basis, attributed to disciplined expense management and modest margin expansion. U.S. Bancorp's net charge-off ratio improved slightly, and its CET1 capital ratio increased by 20 basis points to 10.8%. The bank's total net revenue growth for the full year 2025 is projected to be between 3% and 5%, with positive operating leverage expected to exceed 200 basis points. The second quarter net interest income is anticipated to range from $4.1 billion to $4.2 billion, with non-interest income projected to be stable. The management emphasized a continued focus on tightly managing expenses, driving organic growth, and transforming the payments business to achieve these targets.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 |
| 25.10B | 28.01B | 24.18B | 22.72B | 23.23B | EBIT |
| 7.91B | 7.85B | 10.51B | 10.14B | 6.03B | EBITDA |
| 8.02B | 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 | 130.56B | 125.59B | 161.31B | 199.02B | Total Assets |
| 678.32B | 663.49B | 674.80B | 573.28B | 553.90B | Total Debt |
| 73.52B | 66.76B | 71.05B | 43.92B | 53.06B | Net Debt |
| 17.02B | 5.57B | 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
Positive
43.68
Price Trends
41.36
Positive
43.48
Positive
45.14
Negative
Market Momentum
0.63
Positive
55.51
Neutral
73.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USB, the sentiment is Positive. The current price of 43.68 is below the 20-day moving average (MA) of 43.72, above the 50-day MA of 41.36, and below the 200-day MA of 45.14, indicating a neutral trend. The MACD of 0.63 indicates Positive momentum. The RSI at 55.51 is Neutral, neither overbought nor oversold. The STOCH value of 73.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $69.74B | 12.45 | 11.15% | 3.66% | 3.07% | 19.01% | |
74 Outperform | $19.35B | 10.39 | 11.33% | 4.65% | 1.05% | 12.14% | |
74 Outperform | $29.31B | 12.23 | 9.39% | 2.96% | 1.20% | 1.12% | |
73 Outperform | $25.96B | 12.35 | 11.71% | 3.75% | 5.75% | 0.68% | |
70 Outperform | $69.15B | 10.99 | 11.50% | 4.53% | 2.19% | 34.00% | |
64 Neutral | $12.80B | 9.71 | 7.59% | 16985.66% | 12.07% | -7.53% | |
60 Neutral | $51.88B | 11.68 | 0.10% | 5.26% | -27.31% | ― |
* Financial Sector Average
Performance Comparison
USB
US Bancorp
43.68
6.41
17.20%
TFC
Truist Financial
39.63
4.93
14.21%
FITB
Fifth Third Bancorp
38.30
3.49
10.03%
MTB
M&T Bank
179.91
38.69
27.40%
PNC
PNC Financial
174.70
25.28
16.92%
RF
Regions Financial
21.32
3.45
19.31%
US Bancorp Corporate Events
Executive/Board Changes
U.S. Bancorp Appoints Gunjan Kedia as New CEO
Neutral
Apr 16, 2025
U.S. Bancorp announced significant leadership changes effective April 15, 2025, with Gunjan Kedia appointed as the new President and CEO. Her compensation package includes an increased base salary and a substantial long-term incentive award, reflecting her transition to the CEO role and market pay levels. Andrew Cecere, the former CEO, will continue as Executive Chairman with a defined compensation package and an amendment to his retirement plan, which freezes his supplemental benefits as of April 15, 2025.
Business Operations and StrategyFinancial Disclosures
U.S. Bancorp Reports Strong Q1 2025 Financial Results
Positive
Apr 16, 2025
U.S. Bancorp reported strong financial results for the first quarter of 2025, with a net income of $1,709 million and diluted earnings per share of $1.03. The company achieved a return on tangible common equity of 17.5% and a net revenue increase of 3.6% year-over-year. The bank’s capital levels and asset quality remain robust, with a CET1 capital ratio of 10.8%. Additionally, U.S. Bancorp has expanded its collaboration with State Farm, allowing State Farm customers to apply for personal loans through U.S. Bank, and introduced a new Spend Management platform for business owners to manage card-based spending.
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.