US Bancorp, a prominent player in the Banks-Regional industry, has shown significant growth momentum in recent years. However, there are signs that this momentum may be due for a temporary pause. The company's current valuation stands at a hefty
$95.39B, with a book value of $30.127 and a price to book ratio of 1.63X. Despite a robust profit margin of 0.255, US Bancorp's net income for the last fiscal year was $5.8B, indicating a potential slowdown in profitability. The company's end period cash flow has surged to
$53.5B, up from $28.9B at the beginning of the period, thanks to a change in working capital of $14.7B. However, the firm's net debt stands at $17.5B, which could put a damper on future growth. The payout ratio of 0.4147 and a dividend yield of 0.0543 suggest that the company is returning a significant portion of its earnings to shareholders, which could limit the funds available for future expansion. With a Z score of 0.69, the company's
financial health could be better. The five-year return of 3.16% is modest, and the 52-week high of $48.556 suggests that the stock may be nearing its peak. In light of these factors, investors should exercise caution and closely monitor US Bancorp's performance in the coming quarters. While many baby boomers remain indifferent towards the banking sector, it is worthwhile to examine US Bancorp. We will assess why we maintain confidence in the prospect of a recovery. Is the company's current valuation justified for 2023? In this article, I will present my perspective on the valuation to provide USB investors with a clearer outlook on whether to take a position in the stock.
We determine the current worth of US Bancorp using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of US Bancorp based exclusively on its
fundamental and basic
technical indicators. By analyzing US Bancorp's
financials, quarterly and monthly indicators, and related drivers such as
dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of
US Bancorp's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of US Bancorp. We calculate exposure to US Bancorp's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to US Bancorp's related companies.
US Bancorp Investment Alerts
USB investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring US Bancorp performance across your portfolios.Please check all
investment alerts for USB
US Bancorp Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare USB value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across US Bancorp competition to find
correlations between indicators driving the intrinsic value of USB.
US Bancorp Gross Profit
US Bancorp Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing US Bancorp previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show US Bancorp Gross Profit growth over the last 10 years. Please check US Bancorp's
gross profit and other
fundamental indicators for more details.
Another Deeper Perspective
The entity reported the last year's revenue of 24.18
B. Total Income to common stockholders was 5.83
B with profit before taxes, overhead, and interest of 22.14
B.
| 2020 | 2021 | 2022 | 2023 (projected) |
Net Income | 4.96 B | 7.96 B | 5.83 B | 6.65 B | Gross Profit | 19.42 B | 23.89 B | 22.21 B | 23.37 B |
Margins Breakdown
USB profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or US Bancorp itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of US Bancorp profit margins.
| EBITDA Margin | 0.36 |
| Gross Margin | 0.89 |
| Profit Margin | 0.25 |
US Bancorp Earnings Before Interest Taxes and Depreciation Amortization EBITDA is somewhat stable at the moment. Also, US Bancorp Revenue Per Employee is increasing over the last 8 years. The previous year's value of US Bancorp Revenue Per Employee was 328,663. US Bancorp, a leading player in the financial services sector, has been showing promising growth momentum. However, there are indications that this momentum may experience a temporary pause.
The company's EPS estimate for the current year stands at 4.51, with a slight decrease projected for the next year at 4.5. This suggests a potential slowdown in earnings growth. The company's net income for the recent fiscal year was
$5.83 billion, a robust figure, but the forward PE ratio of 8.569 indicates that the stock may be slightly overvalued. The payout ratio of 0.4147 also suggests that the company is returning a significant portion of its earnings to shareholders, which could limit its ability to reinvest for future growth. US Bancorp's total debt is
$71.05 billion, which, when compared to its net assets of $674.8 billion, results in a debt to equity ratio of 0.50%. This relatively high debt level could pose a risk to the company's financial stability, especially in a rising interest rate environment. In conclusion, while US Bancorp has shown strong growth in recent years, there are signs that this momentum may be set for a temporary pause. Investors should keep a close eye on the company's earnings and debt levels in the coming quarters. .
Our perspective of the current US Bancorp rise
Despite the current Risk-Adjusted Performance of US Bancorp rising to 0.04, we advise maintaining a cautious stance on the stock. While this increase is positive, it does not necessarily indicate a sustained upward trend. There is potential for the price to decline again in the near term. Investors should remain vigilant, considering both the overall market conditions and the bank's
fundamentals before making a decision. This rise could present an opportunity for profit-taking, but it's crucial to closely monitor the stock for any signs of a reversal. US Bancorp currently exhibits a below-average downside deviation. It has an Information Ratio of 0.02 and a Jensen Alpha of 0.01. However, we recommend investors to further scrutinize US Bancorp's expected returns to ensure all indicators align with the current outlook about its relatively low value at risk. Understanding different
market volatility trends often assists investors in timing the market.
Proper use of volatility indicators allows traders to measure US Bancorp's stock risk against market volatility during both bullish and bearish trends. The heightened level of volatility that accompanies bear markets can directly impact
US Bancorp's stock price, adding stress to investors as they watch the value of their shares decrease. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In light of the recent market trends and analyst predictions, investing in US Bancorp Stock (USB) appears to be a promising move. The Naive Expected Forecast Value is at a robust
37.82, indicating a potential for growth. The Analyst Target Price Estimated Value further bolsters this outlook, standing at a strong
44.47. While there are 8 holds and 1 strong sell among the 17 analyst estimates, the presence of 10 strong buys and 2 buys cannot be overlooked. The possible upside price of 40.42, coupled with the Valuation Real Value of 39.47, suggests a positive trajectory for USB in August. However, investors should also consider the possible downside price of 35.22 and remain vigilant of market fluctuations. .
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of US Bancorp. Please refer to our
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