U.S. Bancorp stock price target raised to $51 by Truist on growth potential

Investing.com - Truist Securities has raised its price target on U.S. Bancorp (NYSE:USB) to $51.00 from $49.00 while maintaining a Hold rating on the stock. Currently trading at $48.39, the bank shows a P/E ratio of 11.6x, with InvestingPro analysis suggesting the stock is undervalued relative to its Fair Value.

The price target increase comes as U.S. Bancorp shares complete what Truist describes as a "tough decade," having underperformed the KBW Bank Index (BKX) by approximately 95 percentage points despite being a balanced franchise with solid risk management. The bank has maintained its dividend payments for 55 consecutive years, with 14 years of consecutive dividend increases, demonstrating remarkable financial stability despite market challenges.

Truist points to several factors that have contributed to U.S. Bancorp’s underperformance, including a drawn-out merger approval process, weak performance during the interest rate hiking cycle, and subpar pre-provision net revenue (PPNR) growth over the past decade.

The firm notes that U.S. Bancorp management is attempting to "turn the corner and correct course" by delivering on targets set at its September 2024 investor day, though market skepticism remains evident in consensus estimates and the stock’s price-to-earnings ratio.

Truist’s updated model and subsequent price target increase reflect its assessment of key levers management aims to utilize to improve growth, profitability, and stock performance.

In other recent news, U.S. Bancorp reported its second-quarter earnings for 2025, revealing a strong financial performance. The company achieved an earnings per share (EPS) of $1.11 and a net income of $1.8 billion, marking a 13% growth in EPS compared to the previous year. Additionally, U.S. Bancorp improved its efficiency ratio to 59.2%, indicating better operational efficiency. In a strategic move, U.S. Bank, a subsidiary of U.S. Bancorp, launched a new cash flow platform aimed at small businesses. This platform, named "U.S. Bank bill pay for business," integrates with business checking accounts and offers features such as streamlined cash flow management and bill payment capabilities. These developments reflect U.S. Bancorp’s focus on strategic growth and innovation. The new platform is now available for small businesses with U.S. Bank business checking accounts. This expansion of services is part of U.S. Bancorp’s broader strategy to enhance its product offerings.

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