U.S. Bancorp (USB) Stock Forecast & Price Target

U.S. Bancorp's solid financial performance is highlighted by a 5.3% increase in fee income to $3.085 billion, underpinned by strong growth in net interest margin, which expanded by 9 basis points to 2.75%. The bank also demonstrated resilience in its deposit base, with average deposits rising 1.8% to $511.78 billion, driven primarily by an increase in interest-bearing deposits. Additionally, the successful integration of the Union Bank acquisition is expected to yield continued revenue growth particularly in Impact Finance, enhancing U.S. Bancorp's substantial market presence and broad product offerings.

U.S. Bancorp is experiencing its lowest relative valuation on a price-to-earnings and price-to-tangible book value basis in the last decade, indicating a significant decline in investor confidence. The expectation of a U.S. recession is projected to negatively impact earnings per share estimates for 2025 and 2026 due to anticipated increases in credit losses and weakened loan growth. Additionally, the downward revision of net interest margin estimates, along with frustrations surrounding subpar growth and challenges related to deal approvals, further contribute to a negative outlook for the bank's financial performance.