U.S. Bancorp initiated with a Hold at Truist

Truist analyst John McDonald initiated coverage of U.S. Bancorp (USB) with a Hold rating and $54 price target as part of a broader research note launching coverage of U.S. Large-Cap banks. Big banks are positioned to leverage embedded offense, cyclical recovery and capital flexibility to drive organic franchise expansion, double digit EPS growth, and attractive ROTCE – return on tangible common equity – over FY25 and FY26, the analyst tells investors in a research note. U.S. Bancorp is a “show-me story” however, Truist states, noting that after underperforming during the rate hike cycle, the market is looking for USB to show a sustained net interest margin inflection and widening gap between its revenue and expense growth, driven by a pickup in fees and net interest income along with slowing of annual cost growth.