U.S. Bancorp Well Recognized For Its Quality

Back in January I wrote that U.S. Bancorp (NYSE:USB) would be a relative outperformer in the bank sector if the economy remained lackluster, rate increases failed to materialize, and credit concerns grew. All of that has taken place, and U.S. Bancorp has been a relative outperformer within its peer group on a year-to-date basis (and over the last year as well).

With that outperformance, and a modest downward revision in fair value due to lower/weaker earnings prospects, the relative apparent value has evaporated. To me, U.S. Bancorp seems priced almost exactly as it should be. While I can understand long-term investors being reluctant to part with a quality bank holding (and that is not my recommendation), investors looking to add bank exposure in the large-cap tier may want to shop around.

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U.S. Bancorp Well Recognized For Its Quality