The U.S. Bancorp (USB) stock fell 1.48% this week, with the Fed’s annual “stress test” coming up for banks. It remains to be seen whether USB stock can rally ahead after the test. The Federal Reserve will release the yearly bank health check report on June 28, 2023. The information will provide details on the capital the banks need to face severe economic downturns and also provides grades as per their performance.
U.S. Bancorp (USB Stock) – Awaiting “Stress Test” Results & Financial Analysis
Following the aftermath of the banking crisis in March 2023, three significant banks shut down their operations in just five days. The stocks of the banking sector showed signs of recovery. However, on June 28, they will face a setback in the form of regulatory challenges. Additionally, the KBW bank and KBW regional bank indexes just waded through their worst week since May 2023.
The Federal Reserve wants to implement higher capital requirements for major lenders and provide grading on their operating prowess. The results would help decide a bank’s capital planning and how much cash they can return to respective shareholders through dividends and share buybacks.
The Federal Reserve started this annual exercise after the 2007-2009 financial debacle. This yearly check helps the agency to check the bank’s health and also helps boost the financial health of the banking sector as a whole.
USB stock is trading at $32.55 at press time after swelling 0.71% in the last 24 hours. Previous close and open were at $32.32 and $32.29, respectively. The 52-week change comes with a drop of 29.42%. The trailing twelve-month (ttm) price to earnings (P/E) ratio is 8.70, indicating that it is undervalued and the earnings per share (ttm) is $3.74.
Analysts provided a 2.58 rating for moderate buy and estimated a price target of $49.63 with an upside of 52.5%. With an average volume of 15.05 million shares, the market cap of U.S. Bancorp stands at $49.897 billion. USB Share price rallied 6.44% in a month and dropped 26.36% YTD.
The last earnings were reported on April 19, 2023, where the revenue of $7.175 billion beat the estimate of $7.142 billion by 0.47%, and the surprise came at an increase of $33.343 billion. However, the revenue (ttm) is reported to be $23.4 Billion, and revenue per share in a similar time frame comes up to $15.59. The quarterly revenue growth year-over-year (YoY) jumped by 23.00%.
Operating expenses hiked by 20.14% to $4.15 billion, and operating margin increased by 35.92%. Net profit swelled by 9.06% to $1.70 billion, the net profit margin dropped by 11.36% to 25.29, and the profit margin increased by 25.50%. The gross profit (ttm) is reported to be $22.14 billion.
Total cash in hand at the end of the most recent quarter (mrq) is $70.12 billion, and the total debt in a similar time frame is reported to be $104.17 billion. The subsequent earnings are expected to be reported on July 19, 2023, with an estimated revenue of $7.17 billion.
U.S. Bancorp (USB Stock) – Candle Exploration
The current USB share price is noticeably below the EMA and has been consolidating in a narrow range for some time. A descending EMA indicates weakness, and the Relative strength index (RSI) of 52.19, being in neutral territory, fails to provide a clear signal. If the Fed report is positive, the NYSE: USB price could climb and try to cross R1 or even R2.
If the report for the U.S. Bancorp is below par, the price might test the demand zone. To pull the price below this zone would require a piece of terrible news. Nonetheless, the price action is expected to consolidate in ascending narrow regions for a while.
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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/06/28/u-s-bancorp-usb-stock-eyeing-result-of-fed-bank-health-check/