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With a market cap of $61.3 billion, Minnesota-based U.S. Bancorp (USB) operates as a leading financial services holding company in the United States. The company provides a wide range of banking, investment, and payment services primarily in the Midwest and West regions.
Companies valued at $10 billion or more are generally considered “large-cap” stocks and U.S. Bancorp fits this criterion perfectly. U.S. Bancorp is notable for its status as the fifth largest banking institution in the United States, its ownership of Elavon for credit card transaction processing, and its operation under one of the oldest continuous national charters, highlighting its long-standing presence and stability in the financial market.
However, the bank pulled back almost 14.3% from its 52-week high of $45.85, achieved in December last year. Shares of U.S. Bancorp have fallen 7.5% over the past three months, lagging behind the broader S&P 500 Financials Sector SPDR’s (XLF) marginal gains during the same period.
Over the longer term, USB stock is down 9.2% on a YTD basis, underperforming XLF’s 9.8% gains. Moreover, shares of USB have gained 17.5% over the past 52 weeks, compared to XLF’s 22.9% return over the same time frame.
To confirm the bearish price trend, USB stock has been trading below its 50-day moving average since mid-April and has remained below its 200-day moving average since late-May.
U.S. Bancorp has underperformed primarily due to higher non-interest expenses, increased provisions for credit losses, and a challenging macroeconomic environment with elevated interest rates. Furthermore, the stock dropped almost 3.6% on Apr. 17 following its Q1 earnings results due to lower-than-expected revenue, increased provision for credit losses, and reduced full-year guidance.
To emphasize the stock’s underperformance, its rival JPMorgan Chase & Co. (JPM) is outperforming not just USB but also the broader market. Shares of JPM have risen 37.5% over the past 52 weeks and 15.8% on a YTD basis.
Despite the stock’s underwhelming price action, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 23 analysts covering the stock, and the mean price target of $47.38 indicates a premium of 20.6% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
