EU and US could reach trade deal this weekend - Reuters
Investing.com - DA Davidson raised its price target on U.S. Bancorp (NYSE:USB) to $52.00 from $49.00 on Monday, while maintaining a Buy rating on the stock. The $71.19 billion bank currently trades at a P/E ratio of 10.93, which according to InvestingPro analysis, suggests the stock is trading below its Fair Value.
The firm cited U.S. Bancorp’s delivery of year-over-year positive operating leverage of 250 basis points in the second quarter of 2025. DA Davidson noted this level of positive operating leverage is rare for the bank, which has reported positive operating leverage greater than 0.5% only once since 2016. The bank has demonstrated consistent shareholder returns, having raised its dividend for 14 consecutive years.
U.S. Bancorp’s core fee income showed solid performance, increasing 4.6% year-over-year, and the bank maintained its guidance for mid-single-digit fee income growth. Net interest income faced pressure during the quarter, according to the research note.
DA Davidson highlighted that U.S. Bancorp took several strategic actions during the quarter to position its balance sheet for near-term margin expansion. These moves are expected to help net interest income grow in the second half of 2025.
The firm acknowledged that investors prefer to see positive operating leverage driven by stronger revenue growth rather than expense management, which appears to have been a factor in the bank’s recent performance.
In other recent news, U.S. Bancorp reported second-quarter earnings that surpassed analyst expectations, with earnings per share reaching $1.11 compared to the projected $1.07. Despite this positive earnings result, the company’s revenue fell short of forecasts, coming in at $6.96 billion against the consensus estimate of $7 billion. Net income for U.S. Bancorp rose 13.2% year-over-year, reaching $1.82 billion, and the company achieved a return on tangible common equity of 18% and a return on average assets of 1.08%. Fee income showed a notable increase of 4.6% year-over-year, driven by growth in payment services revenue, trust and investment management fees, and treasury management fees. The net interest margin was slightly down at 2.66% compared to previous quarters. Average total loans saw a modest increase of 1% year-over-year, while average total deposits decreased by 2.1%. Credit quality remained stable with a net charge-off ratio of 0.59%, and the Common Equity Tier 1 capital ratio was at 10.7% at the end of June. These developments reflect U.S. Bancorp’s focus on maintaining a diversified business mix and sound risk management practices amid economic volatility.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.