US Bancorp (NYSE:USB) stock rose 1.10% (As on July 10, 11:22:41 AM UTC-4, Source: Google Finance) after Raymond James has upgraded the company from Outperform to Strong Buy and raised its price target to $57.00 from $51.00. The upgrade reflects Raymond James’ increasing confidence that U.S. Bancorp will achieve its targeted medium-term profitability metrics, according to the firm’s analysis.
Raymond James expects U.S. Bancorp to deliver more than 200 basis points of positive operating leverage this year, followed by over 150 basis points of positive operating leverage in 2026. The firm believes these profitability improvements will shift investor sentiment positively on what it describes as a “show me story” for the bank. Raymond James also noted that the current market skepticism about U.S. Bancorp’s ability to reach its medium-term profitability targets has created a “unique buying opportunity” with shares trading at a discounted valuation. Raymond James said the bank’s medium-term financial targets, outlined in September 2024, including a return on assets of 1.15–1.35% and a return on tangible common equity in the high teens, are realistic and could drive renewed investor interest. The stock trades at a discount to peers, despite an improving earnings outlook.
Moreover, in the first quarter of 2025, net income attributable to U.S. Bancorp was $1,709 million for the first quarter of 2025, $390 million higher than the $1,319 million for the first quarter of 2024 and $46 million higher than the $1,663 million for the fourth quarter of 2024. Net revenue of $6,958 million, an increase of 3.6% year-over-year, including an increase of 2.7% in net interest income on a taxable equivalent basis and an increase of 5.0% in noninterest income. Net interest margin of 2.72%, an increase of 2 basis points on a year-over-year basis and a 1 basis point increase on a linked quarter basis. CET1 capital ratio of 10.8% at March 31, 2025, compared with 10.6% at December 31, 2024. Average total loans increased 2.1% on a year-over-year basis and 0.9% on a linked quarter basis. Average total deposits for the first quarter of 2025 were $3.5 billion (0.7 percent) higher than the first quarter of 2024. Total U.S. Bancorp shareholders’ equity was $60.1 billion at March 31, 2025, compared with $58.6 billion at December 31, 2024, and $55.6 billion at March 31, 2024.
In other recent news, U.S. Bancorp announced a regular quarterly dividend of $0.50 per common share, payable on July 15, 2025. The company also declared dividends on several series of preferred stock, all set to be paid on the same date.