UBS on U.S. Bancorp (USB): Reiterating Highest Conviction 'Buy' Following 4Q Results

UBS maintains a 'Buy' on U.S. Bancorp (NYSE: USB) price target raised from $32 to $34.

UBS analyst says, "USB continues to outperform competitors in returns. USB posted stable (up 1%) revenues despite industry challenges (margin compression and interchange regulations) in 4Q11. Also, USB has one of the lowest operating efficiency ratios in the industry. USB’s core ROCE was 16% this quarter, highest in our coverage."

"We had estimated the gross impact of debit card regulation implemented in 4Q11 would be $75 mln; despite this core revenues increased 1% q/q, helped by mortgage revenues. Also, despite a 4-bp drop in net interest margin, which was in-line with our expectations, strong balance sheet growth drove a 2% increase in net interest income in 4Q11."

For an analyst ratings summary and ratings history on U.S. Bancorp click here. For more ratings news on U.S. Bancorp click here.

Shares of U.S. Bancorp closed at $28.74 yesterday.

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