On Thursday, Oppenheimer has adjusted the price target for shares of U.S. Bancorp (NYSE: USB), bringing it down to $54 from the previous $55, while maintaining an Outperform rating on the stock.
This adjustment follows the company's recent earnings report, which resulted in a 3.6% decline in U.S. Bancorp's share price on the day of the announcement. This decrease contrasted with a 0.7% rise in the BKX Bank Index and a 0.6% fall in the S&P 500 on the same day.
The performance of U.S. Bancorp's stock on earnings day indicated a market reception that was less than favorable, though not disastrous. The financial services firm's earnings have consistently fallen slightly short of expectations, leading to a sense of gradual, ongoing disappointment. The 2024 consensus estimates for U.S. Bancorp began at $5.45 per share at the start of 2023, but current projections suggest that achieving even approximately $4 per share this year would be a fortunate outcome.
Despite the reduction in expected earnings per share, U.S. Bancorp delivered an adjusted Return on Tangible Common Equity (ROTCE) of 17.4% for the quarter. According to the analyst's comments, this figure places U.S. Bancorp among the top performers in the industry in terms of ROTCE, which measures a company's profitability and efficiency in generating profits from its equity.
The recent earnings report and subsequent stock performance reflect the ongoing challenges faced by U.S. Bancorp, as it navigates a financial landscape that has not aligned with prior expectations. While the lowered price target indicates a tempered outlook on the stock's potential, the Outperform rating suggests that Oppenheimer still views U.S. Bancorp as a favorable option within the banking sector.
InvestingPro Insights
In light of Oppenheimer's recent price target adjustment for U.S. Bancorp (NYSE: USB), it's pertinent to consider additional insights provided by InvestingPro. With a market capitalization of $61.58 billion, U.S. Bancorp stands as a prominent player in the Banks industry, a status underscored by its long history of dividend reliability. Notably, the company has maintained dividend payments for 54 consecutive years and has raised its dividend for 13 consecutive years, which may appeal to income-focused investors.
While analysts have revised their earnings expectations downwards for the upcoming period, U.S. Bancorp still presents a mixed financial picture. The company's adjusted Price/Earnings (P/E) ratio for the last twelve months as of Q1 2024 stands at 11.35, potentially indicating a valuation that could attract value investors. Moreover, U.S. Bancorp has reported a 7.51% revenue growth over the same period, though it's important to note a quarterly revenue decline of -8.67% in Q1 2024.
InvestingPro Tips also highlight that despite weak gross profit margins, analysts predict U.S. Bancorp will be profitable this year, with profitability sustained over the last twelve months. This is reflected in the company's basic and diluted earnings per share (EPS) for continuing operations, which were $3.01 as of the last twelve months ending Q1 2024.
For investors seeking a deeper analysis, InvestingPro offers additional tips on U.S. Bancorp, which can be found at https://www.investing.com/pro/USB. Using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a wealth of financial data and expert insights. With several more InvestingPro Tips available, investors have the opportunity to make informed decisions backed by comprehensive data and analysis.
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