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

U.S. Bancorp has displayed solid financial performance, highlighted by a 5.3% increase in fee income amounting to $161 million, reaching $3.085 billion, and a net interest margin expansion of 9 basis points to 2.75%, driven by strategic balance sheet optimizations. Additionally, the bank experienced a 1.8% quarter-over-quarter increase in average deposits, totaling $511.78 billion, alongside steady loan growth, reinforcing its strong market position amid improving economic conditions. With expectations of mid-single digit fee income growth and increased revenue from its longstanding Union Bank acquisition, U.S. Bancorp appears poised for continued financial strength and expansion in the coming years.

U.S. Bancorp is currently experiencing notable challenges, with its stock trading near its lowest relative valuation on a price-to-earnings and price-to-tangible book value basis over the past decade, corresponding with concerns about underperformance. The anticipated economic downturn in the U.S. is expected to exert downward pressure on the bank's earnings projections for 2025 and 2026, primarily due to increasing credit losses and sluggish loan growth. Additionally, revisions to net interest margin estimates, linked to disappointing net interest income performance, have contributed to investor frustration and a lack of confidence in the bank's growth trajectory.