UPDATE: Nomura Equity Research Initiates Coverage on U.S. Bancorp with Buy Rating, $38 PT

In a report published Wednesday, Nomura Equity Research initiated coverage on U.S. Bancorp

with a Buy rating and $38.00 price target. Nomura Equity Research noted, “Initiate with a Buy rating. U.S. Bancorp is a consistently solid performer with a diverse business mix that produces best-in-class returns (16% ROE, 165bps ROA in 2012). While we expect USB‟s revenue growth to slow on softer mortgage revenues and continued NIM pressure, we still expect USB to post mid- to high-single-digit EPS growth in the next two years as management controls costs (expect 100bps of operating leverage in 2013) and the share count shrinks via continued buybacks. The stock is at a premium to the group on P/B, but a discount on a P/E basis (10x 2014E vs. the group at 11.3x). We believe the stock should trade more in line with the group.” U.S. Bancorp closed on Tuesday at $32.96.