U.S. Bancorp regulatory overhang removal ‘a significant positive,’ says BofA

After U.S. Bancorp disclosed that the Fed will not require the company to meet Category II requirements by Dec 31, 2024, BofA analyst Ebrahim Poonawala called this regulatory overhang removal “a significant positive.” Despite the limited appetite among institutional investors to add exposure to bank stocks, the firm contends the stock should garner institutional interest with this regulatory overhang removed as it “minimizes idiosyncratic EPS risk due to reg-induced RWA optimization.” BofA has a Buy rating and $40 price target on U.S. Bancorp shares.