Dallas, Texas 10/24/2013 (Financialstrend) – The S&P 500 Index tracked U.S. Bancorp (NYSE:USB) with a market capitalization of $70 billion has reported its 3Q results on October 16. Since then the stock has appreciated by 3.23% with shares trading at $38 as of 12:00 PM ET. It’s earning per share which came in at $0.76 per share which was in line with analyst expectations. Its revenue came in at $4.89 billion but analysts were expecting to come in at $4.98 billion. The bank also reported that the recent budget logjam had led to a increase in deposits into the back. The bank expects its net interest margin to decline marginally as a result in 4Q. This as per analysts is a disturbing trend since the revenue growth dip is accelerating over the past three quarters. The third quarter results also called out the improved quality of Credit with a appreciable dip in the percent of bad loans.
Over the past 12 months, the bank had posted sales of $12.57 billion with income of $5.52 billion in the same period. In the same time period, it has paid out dividend of $0.92 per share resulting in a dividend yield of 2.42%. Its strong operational and profit margins at 72% and 43% respectively are positive indicators of the long term sustainability of the stock where as the 5.9% dip in sales over the previous quarter is a sign of short term weakness that the bank has to work towards mitigating.
Thanks to its strong fundamentals, analysts have assigned a price target of $40 per share which would be close to its 52 week high valuation. Long term investors in the stock would have seen their investments appreciate by 12.7% over the past 12 months and by 15% over the past 6 months. Investors would be hoping that the stock will continue to post gains over the next few months.
