U.S. Bancorp approved a share buyback plan of up to $3 billion, beginning from Jan. 1. The move followed the Federal Reserve’s bank stress test results of December 2020, which lifted restrictions on share repurchases.
U.S. Bancorp (USB) said that “it will utilize the share repurchase program at its discretion as it continues to monitor the economic environment, manage to its long-term earnings distribution targets while maintaining strong capital levels and remain in compliance with regulatory requirements.”
Further, the company’s board intends to maintain its quarterly dividend of $0.42 per share, which equates to an annual dividend of $1.68 per share and reflects a dividend yield of 3.7%.
U.S. Bancorp’s CEO Andy Cecere said, “The results of this stress test reflect again, the strength of our balance sheet, our diverse businesses and our strong financial discipline.” (See USB stock analysis on TipRanks)
On Dec. 11, Credit Suisse analyst Susan Roth Katzke upgraded the stock to Hold from Sell and raised the price target to $49 (7.5% upside potential), up from $41, citing positive data related to COVID-19 vaccine. The analyst estimated that the stock has more than 10% total return potential.
Meanwhile, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 6 Buys and 6 Holds. The average price target stands at $50.85 and implies upside potential of about 11.5% to current levels. Shares have declined 23.1% year-to-date.
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