Citi upgraded U.S. Bancorp (USB) to Buy from Neutral with a price target of $65, up from $49. U.S. Bancorp has recently lagged the group as investors expressed concerns on return on tangible common equity deterioration as result of a catch up on investment spend, weak payment trends and underearning on net interest margin, the analyst tells investors in a research note. However, the firm believes the bank has “turned the corner” on investment spend and will return to delivering positive operating leverage as expense growth moderates. In addition, its net interest margin “will cure itself over time” as deposit costs are lowered given higher commercial mix as well as fixed asset repricing opportunity, contends Citi.
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Read More on USB:
- U.S. Bancorp price target raised to $55 from $54 at Evercore ISI
- FDIC Chairman Gruenberg to step down in January, Bloomberg reports
- U.S. Bancorp price target raised to $62 from $60 at Wells Fargo
- U.S. Bancorp cuts prime lending rate to 7.75% from 8%, effective November 8
- U.S. Bancorp Executives to Present at Boston Conference
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
