Goldman Sachs analyst Richard Ramsden reinstated coverage of U.S. Bancorp with a Neutral rating and $51 price target following the closing of the Union Bank transaction and with the price target offering 7% upside and 11% total return potential. In the firm’s view, U.S. Bancorp offers a compelling combination of greater operating leverage from the realization of higher cost synergies than guided from the transaction; above-peer revenue growth potential, given potential revenue synergies through increasing product penetration into the Union Bank client base with its more comprehensive product set; and with the completion of the deal, a significantly de-risked loan and securities portfolio and a conservatively marked loan book, which should offer some downside protection from a deterioration in the macro-economic environment.
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