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

U.S. Bancorp's financial performance demonstrates strong resilience and growth potential, highlighted by a 5.3% rise in fee income to $3.085 billion, driven by solid net interest margin expansion and earning asset growth. The bank also reported a sequential increase in average deposits of 1.8% to $511.78 billion, reflecting strong growth in interest-bearing deposits, which bodes well for future liquidity and funding. Furthermore, management anticipates sustained momentum in fee income and continued revenue growth from the Union Bank acquisition, particularly in capital markets and mortgage revenue segments, enhancing the bank's overall financial outlook.

U.S. Bancorp is currently experiencing significant challenges, reflected in its near lowest valuation on a P/E and P/TBV basis over the past decade, triggered by persistent underperformance. The anticipated economic recession in the U.S. is expected to exert pressure on the bank's earnings per share estimates for 2025 and 2026, primarily due to elevated credit losses and subdued loan growth. Additionally, the bank's net interest margin (NIM) estimates have been revised downward amidst disappointing net interest income prints, contributing further to investor concerns regarding its growth potential and overall financial performance.