Categories AlphaGraphs, Analysis, Finance

U.S. Bancorp is mixed-to-bullish ahead of Q3 earnings

U.S. Bancorp (USB), the seventh-largest US bank by assets, will report third-quarter earnings on Wednesday, October 17. The company, which had posted earnings beats during the past two quarters, is expected to follow the suit in the third quarter as well, primarily driven by tailwinds offered by better interest rates and lower commercial taxes. Analysts expect third-quarter earnings of $1.03 per share.

US Bancorp
Courtesy: Fibonacci Blue/ Flickr

The topline is also expected to increase 2% to $5.67 billion, riding on higher net interest and non-interest incomes. The strategic acquisitions that the company had recently made to branch out to newer markets, along with the investments made to enhance its products and services are likely to play a key role in the revenue growth during the quarter.

In the past five years, US Bancorp has reported a revenue CAGR of 3%.

Dividend yield offered by US banks

However, analysts are of split opinions about this stock, given the lackluster performance over the past 2 years. The stock is down 6% in the past 52 weeks as well as on a year-to-date basis. On an average, the stock has a HOLD rating and a price target of $59.78, an upside of 18% from Monday’s trading price of $50.62.

Meanwhile, in a more bullish report, analyst firm Oppenheimer had last month raised the annual earnings target for U.S. Bancorp from the prior estimate of $4.05 to $4.11. This report is expected to work in favor of the stock ahead of Wednesday’s earnings announcement.

U.S. Bancorp tops Q2 earnings estimate

U.S. Bancorp doubles as a decent dividend stock, with the company recently raising its quarterly dividend to $0.37 from $0.30. The  Minneapolis, Minnesota-based bank has a dividend yield of 2.92%, higher than Bank of America (BAC), Citigroup (C) and Goldman Sachs (GS).

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