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

U.S. Bancorp's robust performance is reflected in a 5.3% increase in fee income, reaching $3.085 billion, indicating strong operational momentum despite a minor securities loss. Average deposits grew by 1.8% quarter-over-quarter to $511.78 billion, supported by significant growth in interest-bearing deposits, while the net interest margin expanded by 9 basis points to 2.75%, surpassing forecasts due to strategic balance sheet management. Furthermore, the continued realization of revenue synergies from the Union Bank acquisition, alongside a projected mid-single-digit growth in fee income, positions U.S. Bancorp favorably for sustained financial performance in the upcoming years.

U.S. Bancorp is currently experiencing significant underperformance, trading near its lowest relative valuation on both P/E and P/TBV metrics over the past decade, which indicates investor skepticism about future growth prospects. Concerns regarding an impending U.S. recession are further pressuring earnings per share estimates for 2025 and 2026, primarily due to anticipated higher credit losses and weaker loan growth. Additionally, the bank's net interest margin (NIM) estimates have been revised downward, contributing to investor frustration and suggesting that U.S. Bancorp may struggle to meet its performance targets.