U.S. Bancorp (USB) Stock Forecast & Price Target

U.S. Bancorp's strong financial performance is underscored by a 5.3% increase in fee income, reaching $3.085 billion, coupled with a robust 1.8% growth in average deposits to $511.78 billion, indicating a solid liquidity position. The improvement in net interest margin to 2.75% reflects effective balance sheet optimization strategies and positions the bank favorably for enhanced net interest income growth, with an upward revision in earnings forecasts for 2026. Furthermore, the ongoing revenue benefits from the Union Bank acquisition and strong performance in Impact Finance are projected to foster continued growth in various segments, supporting a positive long-term outlook.

U.S. Bancorp is currently facing significant challenges, as its stock is trading near a ten-year low in terms of price-to-earnings and price-to-tangible book value, reflecting a prolonged period of underperformance. The bank's outlook is further dampened by anticipated pressure on earnings per share estimates for 2025 and 2026 due to an expected economic recession, higher credit losses, and sluggish loan growth, which collectively risk a lower valuation. Additionally, declining net interest margin estimates attributed to soft net interest income results have contributed to investor concerns over the bank's ability to meet performance targets, exacerbating frustrations related to its overall growth trajectory.