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With a market cap of $69.7 billion, Minneapolis, Minnesota-based U.S. Bancorp (USB) is a financial services holding company, providing a broad range of banking and investment services across the United States. The company offers traditional banking products, lending solutions, treasury management, capital markets services, and payment processing for individuals, businesses, and government entities.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and U.S. Bancorp fits this criterion perfectly. U.S. Bancorp has a strong presence in the Midwest and West regions, serving diverse clients through digital platforms, branch locations, and specialized financial services.
However, the regional banking leader is down 21.5% from its 52-week high of $53.98. In addition, shares of USB have declined 17.8% over the past three months, underperforming the broader Nasdaq Composite's ($NASX) 11.3% drop over the same time frame.
Longer term, USB is down 11.4% on a YTD basis, lagging behind NASX's 9.5% decline. Moreover, shares of U.S. Bancorp has dipped 2.1% over the past 52 weeks, compared to NASX's 8.6% return over the same time frame.
Yet, USB has been trading above its 50-day and 200-day moving averages since last year. But, the stock has fallen below its 50-day moving average since mid-December last year.
Despite U.S. Bancorp reporting better-than-expected Q4 2024 adjusted EPS of $1.07, its shares dropped 5.6% on Jan. 16. Total revenues of around $7 billion, while up 3.7% year-over-year, missed the consensus estimate. Weak asset quality was a major issue, as non-performing assets rose 22.6% year-over-year to $1.8 billion, net charge-offs jumped 21.4% to $562 million, and provisions for credit losses increased 9.4% to $560 million. Additionally, net interest margin contracted by 7 basis points to 2.7%, reflecting higher funding costs.
In comparison, rival The PNC Financial Services Group, Inc. (PNC) outperformed USB. Shares of PNC Financial have gained 16.2% over the past 52 weeks and a decline of 9.5% on a YTD basis.
Despite USB’s weak price action, analysts remain moderately optimistic about its prospects. Among the 23 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and it is currently trading below the mean price target of $57.45.
