On Friday, U.S. Bancorp (NYSE:USB) received an upgrade in its stock rating from Neutral to Buy by Compass Point. The firm also increased its price target for the bank's stock to $49.00, up from the previous $46.00.
The adjustment in U.S. Bancorp's rating is accompanied by revised core earnings per share (EPS) estimates for fiscal years 2024 and 2025. Compass Point now anticipates a core EPS of $3.67 for FY24 and $4.40 for FY25. These figures have been adjusted down from the prior estimates of $3.77 and $4.55 respectively.
The revised estimates reflect changes in several financial metrics. The analyst cited a lower core net interest income (NII) and net interest margin (NIM), coupled with reduced core fee income. However, these downward revisions were partially balanced by a lower expected provision compared to previous estimates.
Compass Point's outlook for U.S. Bancorp indicates a belief in the potential for significant share price appreciation over the next twelve months. The firm's revised stance and price target suggest confidence in the bank's future performance despite the adjustments in core financial projections.
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