Today we’re going to take a look at the well-established US Bancorp (NYSE:USB). The company’s stock saw its share price hover around a small range of $48.86 to $53.01 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at U.S. Bancorp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is U.S. Bancorp worth?According to my valuation model, U.S. Bancorp seems to be fairly priced at around 0.35% below my intrinsic value, which means if you buy U.S. Bancorp today, you’d be paying a fair price for it. And if you believe that the stock is really worth $53.2, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like U.S. Bancorp’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from U.S. Bancorp?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. U.S. Bancorp’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in USB’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on USB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on U.S. Bancorp. You can find everything you need to know about U.S. Bancorp in the latest infographic research report. If you are no longer interested in U.S. Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.