U.S. Bancorp (USB, Financial) has recently turned its attention to the evolving landscape of stablecoin payments. The company is currently evaluating and observing this sector closely as discussions intensify around its potential impact on transactions. This strategic focus reflects USB's efforts to navigate and adapt to emerging financial technologies, highlighting the significance of stablecoins in modern payment systems.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for U.S. Bancorp (USB, Financial) is $50.60 with a high estimate of $63.00 and a low estimate of $43.00. The average target implies an upside of 11.85% from the current price of $45.24. More detailed estimate data can be found on the U.S. Bancorp (USB) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, U.S. Bancorp's (USB, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for U.S. Bancorp (USB, Financial) in one year is $45.47, suggesting a upside of 0.51% from the current price of $45.24. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the U.S. Bancorp (USB) Summary page.
USB Key Business Developments
Release Date: April 16, 2025
- Earnings Per Share (EPS): $1.03 for the first quarter.
- Return on Tangible Common Equity: 17.5%.
- Operating Leverage: Positive operating leverage of 270 basis points year-over-year on an adjusted basis.
- Net Charge-Off Ratio: Improved modestly this quarter.
- Fee Income: Represents 41% of total net revenue.
- Payments Business Loan Balances: $42 billion in average loan balances.
- Total Purchase Volumes: $925 billion for the trailing 12-month period.
- Common Equity Tier 1 (CET1) Capital Ratio: Increased 20 basis points to 10.8%.
- Tangible Book Value Per Share: $25.64 at March 31, up 13.8% year-over-year.
- Total Average Deposits: Decreased 1.1% to $507 billion.
- Average Loans: $379 million, a modest increase of 0.9% on a linked quarter basis.
- Net Interest Income: $4.12 billion on a fully taxable equivalent basis.
- Non-Interest Income: $2.8 billion, an increase of 5.0% year-over-year.
- Non-Interest Expense: $4.2 billion, stable with adjusted non-interest expense in the fourth quarter.
- Non-Performing Assets Ratio: 0.5% at March 31.
- Allowance for Credit Losses: $7.9 billion or 2.07% of period-end loans.
- Share Repurchases: Completed $100 million during the quarter.
- Second Quarter 2025 Guidance: Net interest income expected to be $4.1 billion to $4.2 billion; non-interest income approximately $2.9 billion; non-interest expense $4.2 billion or lower.
- Full Year 2025 Guidance: Total net revenue growth estimated to be 3% to 5% compared to 2024; positive operating leverage greater than 200 basis points for the full year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- U.S. Bancorp (USB, Financial) reported earnings per share of $1.03 and a return on tangible common equity of 17.5% for the first quarter.
- The company achieved year-over-year positive operating leverage of 270 basis points on an adjusted basis.
- USB's credit quality and capital levels are strong, with an improved net charge-off ratio and continued capital building.
- The company has a diversified mix of fee-generating businesses, with fee income representing 41% of total net revenue.
- USB's payments business is a key growth area, with $42 billion in attractive average loan balances and a focus on affluent customers.
Negative Points
- The macroeconomic environment remains uncertain, with ongoing discussions around tariffs and potential impacts on the business.
- USB's total average deposits decreased by 1.1% on a linked quarter basis, reflecting seasonal patterns and pricing discipline.
- The company's net interest income was relatively stable compared to the fourth quarter, indicating limited growth in this area.
- Non-interest income was impacted by seasonal declines in Payment Services and less favorable market conditions for Trust and Investment Management fees.
- USB's Merchant Acquiring business, while a differentiator, contributes just over 5% of total revenue and is undergoing a multiyear transformation.
