U.S. Bancorp (NYSE: USB) shares have advanced more than 3% in the last five days, and the current price stands around $58. Wall Street’s three main indexes are advancing this Friday as Federal Reserve Chair Jerome Powell signaled the U.S. central bank would not reduce the bond-buying program in September.
Fundamental analysis: U.S. Bancorp continues to respond to the needs of its clients in the best possible way
U.S. Bancorp is an American bank holding company that provides banking, investment, mortgage, trust, and payment services products. U.S. Bancorp shares continue to trade above $55 support, and the bank’s business has proven stability throughout the first half of the 2021 year.
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In July, U.S. Bancorp reported its second-quarter results; total revenue has decreased only -1% Y/Y to $5.78 billion, while the GAAP EPS was $1.28 (beats by $0.14). The bank reported a net income of $1.98 billion for the second quarter of 2021 year, while CEO Andy Cecere said that the outlook is promising for the rest of the year.
Wall Street’s three main indexes are advancing this Friday as Federal Reserve Chair Jerome Powell signaled the U.S. central bank would remain patient as it tries to reach full employment. FED’s ultra-loose monetary policy will continue to pressure the margins of this bank; still, U.S. Bancorp will probably further improve its position in the upcoming months.
“Even though a lot of the other Fed presidents have come out and said ‘we’re going to reduce the bond-buying program sooner rather than later, prudent Powell is going to make sure that the economy really is healed,†said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
U.S. Bancorp continues to respond to the needs of its clients in the best possible way, and the bank’s fee businesses continue to benefit from improving consumer and business spending trends. The pace of the global recovery is exceeding earlier expectations, and because of this, the outlook for bank returns is significantly more favorable currently than even a few months ago.
U.S. Bancorp reported that it has agreed to acquire fintech platform Bento Technologies, and the transaction is expected to close in September. This acquisition is a part of USB’s efforts to simplify cash flow and money management for small businesses.
U.S. Bancorp continues to move in the right direction, and with a market capitalization of $85.46 billion, shares of this bank are reasonably valued. U.S. Bancorp is currently trading at a forward P/E ratio of around 11; the ongoing economic recovery should continue to drive growth in high-margin payment fees, and shares of this bank have a low-risk exposure with good upside potential.
Technical analysis: $60 represents the first resistance level
U.S. Bancorp shares have advanced more than 3% this trading week, and according to technical analysis, the bulls remain in control of the price action for now. Rising above $60 supports the continuation of the bullish trend, and the next price target could be around $65.
On the other side, if the price falls below $55, it would be a “sell†signal, and we have the open way to $50.
Summary
Wall Street’s three main indexes are advancing this Friday as Federal Reserve Chair Jerome Powell signaled the U.S. central bank would not reduce the bond-buying program in September. U.S. Bancorp continues to move in the right direction even though FED’s ultra-loose monetary policy will continue to pressure the margins of this bank.
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