Market Overview

Compass Point Lowers Price Target On U.S. Bancorp As Price Reflects Consistency


In a report published Thursday, Compass Point analyst Kevin Barker reiterated a Neutral rating on U.S. Bancorp (NYSE: USB), but lowered the price target from $43.00 to $42.00.

In the report, Compass Point noted, “We maintain our Neutral rating and lower our price target to $42 from $43 following the release of 4Q14 earnings. We have lowered our target primarily due to a decline in our core PPNR estimate from higher operating expenses. USB reported operating EPS of $0.78, beating the consensus and our estimate by $0.01. Core PPNR was slightly below our estimate due to elevated expense levels caused by increased spending on risk and compliance activities (a theme across all banks this Q) and marketing expenses. The elevated expense levels will likely persist into 2015 and have impacted our operating expense forecasts.

"Despite higher operating expenses, USB was able to buck the trend by reporting higher NII as the NIM stayed relatively stable in a competitive loan environment. Although the quarter was not great by USB's lofty standards, the company remains well positioned to grow earnings over the long-term as it continues to show outsized loan growth and return a healthy amount of capital to shareholders. We are positively biased on shares of USB given it remains one of the best managed large cap regional banks. However, in an expansionary economic environment, the company will tend to lag regional bank peers due to its conservative lending strategy and elevated valuation near 2.5x TBV. Our FY15E and FY16E EPS estimates remain at $3.25 and $3.46, respectively. Our estimates do not assume a rise in rates.”

U.S. Bancorp closed on Wednesday at $42.20.

Latest Ratings for USB

Nov 2019MaintainsNeutral
Oct 2019MaintainsNeutral
Oct 2019DowngradesNeutralSell

View More Analyst Ratings for USB
View the Latest Analyst Ratings

Posted-In: Compass Point Kevin BarkerAnalyst Color Price Target Analyst Ratings


Related Articles (USB)

View Comments and Join the Discussion!

Latest Ratings

WEEDCantor FitzgeraldMaintains18.9
TGTXCantor FitzgeraldMaintains19.0
SPLKCleveland ResearchDowngrades
IQVWolfe ResearchUpgrades
PRAHWolfe ResearchUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Benzinga's Top #PreMarket Losers

Wells Fargo Downgrades Dunkin Brands Group To Market Perform