U.S. Bancorp's Leverage To A Spending Recovery Starting To Emerge

 

I was bullish when I last wrote on U.S. Bancorp (USB) shares, and since the stock has outperformed its large bank peer group by a little more than 1,000bp – not bad for a roughly half-year performance. With the economy coming back to life, I believe U.S. Bancorp is finally getting some credit not only for its revenue growth leverage to consumer and business spending, but the operating leverage those high-margin payments businesses can generate.

With the standout year-to-date performance (Wells Fargo (WFC) is one of the relatively few to have meaningfully outperformed U.S. Bancorp), I can’t say that the upside I saw earlier this year is still there, and the potential returns seem more on par with other high-quality large banks. That said, if U.S. Bancorp can leverage more growth out of its fintech investments (and/or more operating leverage), there could still be some upside here.

 

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U.S. Bancorp's Leverage To A Spending Recovery Starting To Emerge