AMZN
USB
The bank is spending more — but so far, it’s working
U.S. Bancorp just gave analysts enough to chew on: stronger-than-expected Q2 earnings, better revenue growth, and 400 basis points of positive operating leverage. Translation? The bank is still spending, but it’s not doing it like a goldfish with a credit card.
DA Davidson’s Peter Winter kept his Buy rating on USB and lifted his price target from $72 to $74, pointing to the company’s improving profitability and revenue mix. For a regional bank, that’s the kind of note investors like to clip to the fridge.
Why the Street is paying attention
Winter flagged a few things that matter:
- Earnings came in at $1.35 per share, ahead of the $1.29 consensus estimate
- Fee income rose to $3.325 billion, helped by broad-based growth
- The bank’s guidance still calls for 4%–6% net interest income growth and 12%–14% fee income growth
- Expenses are rising again, but management says that’s part of investing for future growth
The Amazon tie-in is worth a side-eye, too. USB’s guidance includes a revenue contribution from the transition of Amazon.com small business credit cards, which is the kind of relationship that can quietly move the needle without making a big splashy headline.
Big picture
If USB can keep the revenue machine humming while expenses climb at a controlled pace, the stock could keep clawing back toward the premium valuation bulls keep talking about. Big picture: this is less about one rosy quarter and more about whether U.S. Bancorp can turn a good rebound into a durable one.