Earnings Preview: U.S. Bancorp

| About: U.S. Bancorp (USB)

U.S. Bancorp (USB) is scheduled to report its Q2 2012 results on July 18, 2012, before the market opens. The street expects EPS and revenue of $0.69 and $4.97B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from USB and the news from its closest competitors.

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.67 EPS, beating analyst estimates of $0.64.

U.S. Bancorp EPS Historical Results vs Estimates

The consensus EPS estimate is $0.69 based on 32 analysts' estimates, up from $0.60 a year ago. Revenue estimates are $4.97B, up from $4.69B a year ago. The median target price by analysts for the stock is $34.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On April 19, 2012, Compass Point reiterated Neutral rating for the company.
  • On April 18, 2012, Barclays reiterated Overweight rating for the company.
  • On April 2, 2012, the company was downgraded from Buy to Hold at Stifel Nicolaus.
  • On February 8, 2012, the company was downgraded from Buy to Neutral at Compass Point.

Latest News

  • On June 19, 2012, US Bancorp announced that it has declared a quarterly dividend of $0.195 per common share, payable July 16, 2012, to shareholders of record at the close of business on June 29, 2012.
  • On April 13, 2012, Reuters reported that Bank of America Corporation and US Bancorp have been sued by a Chicago pension fund that said they failed to protect investors in their roles as trustees for mortgage backed securities for Washington Mutual Inc.
  • On March 13, 2012, US Bancorp announced that the Board of Directors of U.S. Bancorp has approved a 56% increase in the dividend rate on U.S. Bancorp common stock to $0.78 on an annualized basis, or $0.195 on a quarterly basis.
  • On February 1, 2012, US Bancorp announced that its lead bank, U.S. Bank National Association, entered into a definitive agreement to purchase the institutional trust business providing services to retirement plans, labor management trusts, and registered investment advisors from Union Bank, N.A. Terms of the transaction were not disclosed.
  • On January 30, 2012, US Bancorp announced that its lead bank, U.S. Bank National Association, has entered into a definitive agreement to purchase the Indiana corporate trust business of UMB Bank, n.a., a subsidiary of UMB Financial Corp.
  • On January 28, 2012, U.S. Bancorp announced that effective immediately, its lead bank, U.S. Bank National Association, has acquired the banking operations of BankEast, a subsidiary of BankEast Corporation, from the Federal Deposit Insurance Corporation (FDIC).

Competitors

U.S. Bancorp could be compared to Bank of America Corporation (BAC), Citigroup, Inc. (C), The Goldman Sachs Group, Inc. (GS), JPMorgan Chase & Co. (JPM), and Wells Fargo & Company (WFC). Below is the table comparison of the most important ratios between these companies and the industry.

U.S. Bancorp key ratio comparison with direct competitors

Below is the chart comparison with the stock price changes as a percentage for the selected companies for the last one year period.

USB ChartClick to enlarge

USB data by YCharts

Competitors' Latest Development

  • On July 11, 2012, Zamansky & Associates LLC announced that it is investigating JPMorgan Chase & Co. over sales of mutual funds and Chase Strategic Portfolios for possible securities fraud and/or breaches of duties owed to bank and brokerage firm customers.
  • On July 9, 2012, Reuters reported that Dutch pension fund Pensioenfonds Vervoer has filed two claims totalling up to EUR240 million ($300 million) against a unit of Goldman Sachs Group, alleging negligence leading to losses.
  • On July 7, 2012, An American investor filed a class-action lawsuit against British banking giant Barclays PLC, JPMorgan Chase & Co., Citigroup Inc and a group of other banking defendants claiming the banks' alleged manipulation of the Euro Interbank Offered Rate (Euribor) cost investors millions of dollars in a practice that began as early as 2005.
  • On July 6, 2012, Reuters reported that Goldman Sachs Group Inc has secured three properties in Tokyo for JPY25 billion ($313 million) as its asset management unit prepares to set up a private real estate investment trust (REIT).
  • On July 6, 2012, Resolute Mining Limited announced that Bank of America Corporation and its related bodies corporate have ceased to be shareholders of the Company effective June 29, 2012.
  • On July 6, 2012, Reuters reported that a U.S. judge has ordered JPMorgan Chase & Co. to explain why the court should not force the bank to turn over 25 internal emails demanded as part of an investigation into whether it manipulated electricity markets in California and the Midwest.
  • On July 5, 2012, The Economic Times reported that Mahindra And Mahindra Ltd may be considering a bid for Hawker Beechcraft; the bankrupt aircraft maker, Bloomberg reported.
  • On July 4, 2012, Reuters reported that Goldman Sachs Group Inc lost an appeal on Tuesday against a $20.6 million arbitration award won by creditors of bankrupt hedge fund Bayou Group.
  • On July 4, 2012, Reuters reported that U.S. energy regulators have subpoenaed JPMorgan Chase & Co. to produce 25 internal emails as part of an investigation into whether the bank manipulated electricity markets in California and the Midwest.
  • On July 3, 2012, Bank of America Corp announced that the Board of Directors has authorized dividends on preferred stock. A quarterly cash dividend of $0.38775 per depositary share on the 6.204% Non-Cumulative Preferred Stock, Series D, is payable on September 14, 2012 to shareholders of record as of August 31, 2012.
  • On July 3, 2012, Reuters reported that JPMorgan Chase & Co.'s One Equity Partners, the Company's private investment arm, will buy technology services firm M*Modal Inc. for about $1.1 billion in cash.
  • On June 29, 2012, Reuters reported that Goldman Sachs Group Inc trimmed staff in its U.S. operations on Thursday, amid a slowdown in capital markets activity. The investment bank cut several dozen jobs at its offices in New York, New Jersey and Salt Lake City, Utah.
  • On June 26, 2012, Citigroup Inc announced that it has been awarded a contract renewal of its fund services to Victory Capital Management and to the Victory Funds. Citi will continue to provide administration and accounting services to Victory Capital Management and serve as the global custodian and transfer agent to the Victory Funds.
  • On June 25, 2012, Reuters reported that Julius Baer Gruppe AG in talks with Bank of America Corporation about buying Merrill Lynch's non-U.S. wealth management unit, is particularly interested in its presence in Asia and Latin America.
  • On June 25, 2012, Integra Mining Ltd. announced that JPMorgan Chase & Co. and its affiliates have ceased to be shareholders of the Company effective April 9, 2012.
  • On June 25, 2012, Wells Fargo & Company announced that it has reached a definitive agreement to acquire WestLB's subscription finance portfolio. The portfolio contains approximately $6 billion in commitments (approximately $3 billion outstanding).
  • On June 22, 2012, Reuters reported that Ratings agency Moody's downgraded 15 banks on Thursday, lowering credit ratings by one to three notches to reflect the risk of losses they face from volatile capital markets activities, but banks criticized the move as backward looking.
  • On June 22, 2012, Reuters reported that A U.S. federal judge said that shareholders can proceed with a lawsuit accusing Goldman Sachs Group Inc of concealing conflicts of interest in several collateralized debt obligation transactions.
  • On June 22, 2012, Reuters reported that Ratings agency Moody's downgraded 15 banks on Thursday, lowering credit ratings by one to three notches to reflect the risk of losses they face from volatile capital markets activities, but banks criticized the move as backward looking.
  • On June 21, 2012, Reuters reported that Bank of America Corp directors have reached a definitive settlement of litigation by shareholders, who accused the bank of overpaying for Merrill Lynch & Co, a federal judge said on Wednesday.
  • On June 21, 2012, Reuters reported that JPMorgan Chase & Co.'s asset management business has created a new unit, which will oversee $100 billion in assets under management and incorporate teams from the company's investment management and wealth management divisions.
  • On June 19, 2012, Reuters reported that Japan has excluded Nomura Holdings, Inc. from working on the government's sale of roughly $6 billion worth of JAPAN TOBACCO INC. shares.
  • On June 19, 2012, Reuters reported that Julius Baer Gruppe AG was in talks about buying Bank of America Corp's non-U.S. wealth management operations, reported to be worth up to $2 billion.
  • On June 19, 2012, Reuters reported that Japan has excluded Nomura Holdings, Inc. from working on the government's sale of roughly $6 billion worth of JAPAN TOBACCO INC. shares.
  • On June 15, 2012, Bank of America Corp announced the Board of Directors authorized a regular quarterly dividend of $18.125 per share on the 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L. The dividend is payable on July 30, 2012 to shareholders of record as of July 1, 2012.
  • On June 15, 2012, Wells Fargo & Co announced that it has doubled its ExpressSend remittance network payout locations in India through an agreement with HDFC Bank Limited.
  • On June 14, 2012, International Game Technology announced that its Board of Directors has authorized a new share repurchase program of up to $1 billion of the Company's outstanding common stock.
  • On June 12, 2012, Indophil Resources NL announced that Bank of America Corporation and its related bodies corporate have ceased to be shareholders of the Company effective June 7, 2012.
  • On June 11, 2012, REN Redes Energeticas Nacionais SGPS SA (REN) announced that on June 11, 2012 JP Morgan Securities Ltd, a subsidiary of JPMorgan Chase & Co, acquired 28,131,422 ordinary shares class A, corresponding to 5.272% of REN's share capital .
  • On June 6, 2012, Reuters reported that U.S. bank regulators will review whether JPMorgan Chase & Co. executives should have to give back compensation due to the bank's failed hedging strategy that has produced at least $2 billion in losses.

Technical Overview


The stock has a market capitalization of $60.42B and is currently trading at $31.90 with a 52 week range of $20.10 - $32.98. The stock's year-to-date performance has been 19.39%. It is currently trading above 20, 50 and 200 SMA. It has been trading in an upward channel since September 2011.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.