Assessing U.S. Bancorp’s Valuation After Analyst Upgrades and Strong Recent Profit Growth

U.S. Bancorp (USB) is back on investors radar as Wall Street leans more optimistic, with several firms reaffirming constructive views ahead of Q4 earnings after the bank delivered an 18% profit jump in Q3.

See our latest analysis for U.S. Bancorp.

The upbeat Q3 and steady dividend signals seem to be feeding into the tape, with a roughly 13% year to date share price return and an 18% one year total shareholder return suggesting momentum is building rather than fading at the current share price of $54.16.

If U.S. Bancorp’s recent strength has you thinking about what else could rerate, this might be the moment to explore fast growing stocks with high insider ownership.

With the stock now near consensus targets and boasting a strong earnings beat, dividend, and multi year outperformance, the key question is whether U.S. Bancorp still trades at a discount or if markets already price in its next leg of growth.

Most Popular Narrative: 2.6% Undervalued

With the narrative fair value just above U.S. Bancorp’s last close, the market is treating recent momentum as sustainable rather than fleeting.

Analysts are assuming U.S. Bancorp's revenue will grow by 8.5% annually over the next 3 years.

Analysts assume that profit margins will shrink from 25.5% today to 22.8% in 3 years time.

Read the complete narrative.

Curious how modest margin compression still supports a higher future earnings base and valuation multiple for a regional bank, not a hyper growth tech name? The full narrative walks through the revenue ramp, earnings trajectory, and future multiple that need to line up almost perfectly to justify that fair value view.

Result: Fair Value of $55.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could unravel if commercial real estate stress deepens or fintech competition accelerates, which could pressure fee income and credit quality faster than expected.

Find out about the key risks to this U.S. Bancorp narrative.

Build Your Own U.S. Bancorp Narrative

If you see things differently, or want to test your own assumptions against the numbers, you can build a custom view in minutes, Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding U.S. Bancorp.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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