U.S. Bancorp: Get Out Before The Fed Pivot

Jul. 22, 2024 11:50 PM ETU.S. Bancorp (USB) StockUSB27 Comments
The Asian Investor
29.41K Followers

Summary

  • U.S. Bancorp beat Q2 earnings estimates, and revenues also exceeded expectations. However, the lender's NII declined 8.9% year over year.
  • The lender has good balance sheet quality and credit metrics, but it faces risks of cyclically declining net interest income due to the Fed's upcoming rate pivot.
  • Shares of USB are fully valued at a 41% premium to book value, with limited upside potential and an unappealing risk profile for long-term investors.

US Bank ATM and branch

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U.S. Bancorp (NYSE:USB) beat second-quarter earnings consensus estimates last week Wednesday, despite the commercial bank reporting a 9% decline in its net interest income. I believe, the lender's net interest income will continue to decline as the Fed gets ready for

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