As U.S. Bancorp (USB) Drops, Investors Seek Opportunity

U.S. Bancorp was one of the market's biggest losers today, losing 8.6% of its value and underperforming the S&P500 and Dow Industrial composite indices by 7.53% and 7.41% respectively. The large-cap Finance company ended the day at $33.23, closing in on its 52 week high low of $32.72 and is 39.14% below its average target price of $54.61. Over the last 12 months, U.S. Bancorp is down -33.14%, and has underperformed the S&P 500 by 21.87%. The stock has an average analyst rating of buy.

U.S. Bancorp has a trailing 12 month price to earnings (P/E) ratio of 10.42, which corresponds to its share price divided by its trailing earnings per share (EPS) of $3.19. The company's forward P/E ratio is 6.17 based on its forward EPS of $5.39.

Earnings refer to the net income of the company from its sales operations, and the P/E ratio tells us how much investors are willing to pay for each dollar of these earnings. By way of comparison, the Finance sector has historically had an average P/E ratio of 14.34. Whether the company's P/E ratio is within a high or low range tells us how investors are currently valuing the stock's earning potential, but it doesn't tell us how its price will move in the future.

Another metric for valuing a stock is its Price to Book (P/B) Ratio, which is its share price divided by its book value per share. The book value refers to the sum of all of the company's tangible assets and liabilities. U.S. Bancorp's P/B ratio of 1.627 indicates that the company is fairly valued when compared to the Finance sector's average P/B ratio of 1.57.

U.S. Bancorp's operating margins suggest the bank faces profitability issues/

Date Reported Revenue (k) Operating Expenses (k) Operating Margin YoY Growth
2022-12-31 $23,724,000 $4,381,000 10.37% 657.53%
2021-12-31 $24,762,000 $12,668,000 -1.86% 95.6%
2020-12-31 $20,316,000 $11,732,000 -42.29% -211.64%
2019-12-31 $22,453,000 $11,210,000 -13.57% -34.62%
2018-12-31 $22,637,000 $11,076,000 -10.08% n/a
  • Average operating margins: -11.49 %
  • Average operating margins growth rate: 101.37 %
  • Coefficient of variability (lower numbers indicate more stability): 170 %

Overall, U.S. Bancorp seems to be a strong business with an attractive valuation, but its lack of profitability is a definite warning sign.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.