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

U.S. Bancorp demonstrates a positive financial trajectory, evidenced by a solid 5.3% increase in fee income to $3.085 billion and a 1.8% quarter-over-quarter rise in average deposits to $511.78 billion, primarily driven by growth in interest-bearing deposits. The bank's net interest margin expanded by 9 basis points to 2.75%, supported by strategic balance sheet optimization and a forecasted net interest income increase to $17.38 billion for 2026, reflecting a favorable outlook for profitability. Additionally, the ongoing realization of revenue benefits from the Union Bank acquisition, along with growth in Impact Finance revenue, positions U.S. Bancorp for sustained expansion in coming years.

U.S. Bancorp is currently experiencing a significant underperformance, as evidenced by its trading near the lowest relative valuations in terms of price-to-earnings (P/E) and price-to-tangible book value (P/TBV) ratios over the past decade. The bank's net interest margin (NIM) has also been revised lower, contributing to expectations of higher credit losses and weaker loan growth amid recessionary pressures, which are negatively impacting earnings per share (EPS) estimates for 2025 and 2026. Furthermore, frustrations regarding slow growth and complications from a drawn-out approval process for the MUFG Union deal have adversely affected investor sentiment and the bank's balance sheet.