Stifel Nicolaus reported on Monday that they have upgraded regional banking company, U.S. Bancorp(USB).
The firm, has raised their rating on the company from “Hold” to “Buy,” and has initiated a $39 price target. This price target suggests a 13% increase from the stock’s current price of $33.83.
An analyst from the firm commented, “we arrive at our $39 target price by applying a 12x multiple to our 2014 estimate of $3.25. We believe a premium P/E multiple is warranted, given the company’s superior ROA and earnings levers in the challenging operating environment. Risks to this target price include a weaker-than-expected economic recovery, which could lower earnings estimates because of weak loan growth and/or higher credit losses. In addition, a dilutive acquisition by the company could be viewed negatively by investors.”
U.S. Bancorp shares were mostly flat during Monday morning trading. The stock has increased 16% in the past year.
The Bottom Line
Shares of U.S. Bancorp(USB) have a 2.32% yield, based on Friday’s closing price of $33.65.
U.S. Bancorp(USB) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.