June update: should you buy or sell U.S. Bancorp shares?

U.S. Bancorp (NYSE: USB) shares have advanced from $43 above $62 since the beginning of February 2021, and the current price stands around $60.7.

Fundamental analysis: U.S. Bancorp continues to move in the right direction

U.S. Bancorp is an American bank holding company that provides banking, investment, mortgage, trust, and payment services products. U.S. Bancorp is a stable bank with a good position in the market that has a well-diversified business profile with a large part of revenues coming from commissions and fees.

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U.S. Bancorp shares have been moving in an uptrend last several months, and the bank’s business has proven stability throughout the Covid-19 pandemic. U.S. Bancorp reported its first-quarter results in April; total revenue has decreased by -5.2% Y/Y to $5.47 billion, while the GAAP EPS was $1.45  (beats by $0.49).

“Credit quality continues to perform better than we had expected – in fact, we incurred the bank’s lowest net charge-off ratio in recent decades, and an improved outlook for future performance allowed us to release over a billion dollars in reserves for credit losses,” said Chairman, President, and CEO Andy Cecere.

It is also important to mention that U.S. Bancorp returned $1.3 billion to shareholders during the first quarter in the form of dividends and share buybacks. The increasing vaccinations and the economy reopening will drive higher growth, and CEO Andy Cecere said that he expects that the first quarter will be a low point for net interest income.

According to U.S. Community Bank Market Reports, the outlook for bank returns is significantly more favorable currently than even a few months ago. The main reason for this is that the credit quality will continue to improve due to the accelerated pace of vaccinations and additional government stimulus.

U.S. Bancorp has maintained its quarterly dividend at $0.42 per share for the past seven quarters, and the stock’s 2.7% dividend payout still remains attractive. U.S. Bancorp continues to move in the right direction, and in this ongoing bull market, shares of this company have upside potential.

Technical analysis: Positive trend remains intact

U.S. Bancorp shares have advanced more than 25% since the beginning of 2021, and at the current stock price, this bank is reasonably valued.

If the price jumps above $65 resistance, it would be a signal to trade  U.S. Bancorp shares, and the next target could be around $70. Rising above $70 supports the continuation of the bullish trend for USB shares, but if the price falls below $50, it would be a strong “sell” signal.

Summary

U.S. Bancorp shares have been moving in an uptrend last several months, and the bank’s business has proven stability throughout the Covid-19 pandemic. U.S. Bancorp expects a successful 2021, and as more people get vaccinated, economic activities will start to recover, which is driving investor sentiment.