On Monday, Piper Sandler analysts upgraded U.S. Bancorp (BVMF:USBC34) stock, trading on the New York Stock Exchange under the ticker NYSE:USB, from Neutral to Overweight. The upgrade comes amid a period of reassessment for the financial institution, which has seen its performance lag behind peers over the past year.
U.S. Bancorp has underperformed compared to other large regional banks, trailing the peer median by more than 10 percentage points in the past 12 months. This has resulted in the stock trading at a discount relative to its counterparts.
The analysts set a price target of $58.00 for the bank's shares. The bank's strategic decisions, including the UB transaction, were initially met with challenges, especially during the mini-crisis of 2023, which forced the bank to focus on building capital rather than capitalizing on market disruptions.
Additionally, revenue momentum was a point of concern throughout 2024, with the first half of the year raising questions about net interest income and the second half about fee growth.
However, Piper Sandler notes that U.S. Bancorp is at a turning point. Management has indicated that recent investments are now integrated into the cost structure and are starting to yield results. The bank is positioned to return to a pattern of consistent and potentially accelerating positive operating leverage.
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