US Bancorp Shares rise after Baird analyst upgrades investment rating to 'Outperform'
NEW YORK (AP) -- U.S. Bancorp's stock price makes it an attractive buy for investors, RW Baird analyst David George said Monday as he upgraded the shares to the firm's highest investment rating.
U.S. Bancorp shares have slipped 10 percent since mid-October. George upgraded his rating on the bank to "Outperform" from "Neutral" and boosted his stock price target by $4 to $29.
"USB shares trade at what we view as a deserved premium to other banks on our estimates of normalized earnings," George wrote in a note to investors. "Despite this premium, the stock trades at a discount to peers on consensus 2011 EPS estimates, likely due to our view that USB will achieve normalized EPS faster than peers given the companys lower-risk loan book and high pre-provision returns on capital."
Shares rose 55 cents, or 2.4 percent, to $23.50 in premarket trading.
The Minneapolis bank is buying small banks, adding to its earnings potential, George said, and increasing its market share through the downturn. He also expects it to be among the first of the big regional banks to raise its dividend.
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