US Bancorp (USB – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Ebrahim Poonawala from Bank of America Securities reiterated a Buy rating on the stock and has a $49.00 price target.
Ebrahim Poonawala has given his Buy rating due to a combination of factors that suggest a positive outlook for US Bancorp’s stock. Despite the current lack of enthusiasm among investors, Poonawala sees potential for the company to achieve better-than-expected quarterly results, which could instill confidence in management’s ability to reach their medium-term return on assets target. The anticipated improvement in payments revenue, along with a potential increase in buybacks and fee growth, are seen as key drivers for future performance.
Additionally, Poonawala highlights the importance of tight expense control as a means to improve the company’s return on assets. The management’s focus on cost savings through real estate consolidation and back-office efficiencies, along with the resilience of the payments business, are expected to support earnings growth. While acknowledging the absence of immediate catalysts, Poonawala views the stock’s risk/reward profile as attractive, with expectations of margin expansion and disciplined expense management contributing to double-digit earnings growth over the next two years.
Poonawala covers the Financial sector, focusing on stocks such as Goldman Sachs Group, JPMorgan Chase & Co., and Morgan Stanley. According to TipRanks, Poonawala has an average return of 10.2% and a 60.26% success rate on recommended stocks.
In another report released on March 14, Barclays also maintained a Buy rating on the stock with a $61.00 price target.