Why Is U.S. Bancorp Stock Gaining Friday?

U.S. Bancorp (NYSE:USB) stock is trading higher on Friday as D.A. Davidson maintained its bullish outlook on the bank, citing strong revenue growth, improving profitability and solid credit quality. In a Thursday research note, analyst Peter Winter reiterated a Buy rating and a $73 price forecast. Winter believes sustained revenue growth and industry-leading profitability could help U.S. Bancorp command a higher valuation. Strong Revenue Growth Supports Bullish View U.S. Bancorp reported third-quarter earnings of $1.34 per share, beating both D.A. Davidson’s estimate and the consensus forecast of $1.33. Revenue rose 10.9% year over year, excluding securities losses. The bank also delivered 240 basis points of positive operating leverage, as revenue grew faster than expenses. Net interest income climbed 2.5% sequentially to $4.49 billion. Meanwhile, net interest margin improved by five basis points to 2.84%, exceeding Winter’s 2.81% forecast. The analyst highlighted improving loan yields and higher returns from assets being repriced as key drivers of profitability. See More: Top Value Stocks Amazon Partnership Adds Growth Potential Winter also sees opportunities from U.S. Bancorp’s partnership with Amazon.com Inc. (NASDAQ:AMZN). The bank acquired Amazon’s roughly $1.7 billion small-business credit card portfolio in August, gaining approximately 70,000 co-branded customers. D.A. Davidson expects the portfolio to generate $75 million to $85 million in quarterly revenue, with roughly two-thirds coming from net interest income. Additionally, U.S. Bancorp expects its net interest margin to reach 3% sometime in 2027, supported by higher-yielding assets and the Amazon partnership. Analyst Raises Earnings Estimates Following the third-quarter results, Winter raised his 2026 earnings forecast to $5.31 per share from $5.27. He also increased his 2027 estimate to $5.86 from $5.82. The analyst expects the bank’s strong profitability and revenue momentum to support its valuation. U.S. Bancorp also plans to resume share repurchases within the next one or two quarters as capital levels improve. However, rising expenses remain a consideration as the bank continues investing in technology and future growth. Despite those costs, Winter remains bullish, citing healthy credit trends, improving margins and sustained revenue growth as reasons for maintaining his $73 price forecast. Wall Street Remains Bullish The stock carries a Buy rating with an average price forecast of $69.65. Recent analyst actions include: RBC Capital: Maintained Outperform, lowered its price forecast to $65 (Oct. 16). Evercore ISI Group: Maintained Outperform, raised its price forecast to $67 (Oct. 16). TD Cowen: Maintained Buy with a $70 price forecast (Oct. 8). USB Price Action: U.S. Bancorp shares were up 1.71% at $58.37 at the time of publication on Friday, according to Benzinga Pro data. Photo via Shutterstock Read Also: JPMorgan, Bank of America, Wells Fargo Among 9 Banks Accused of Political, Religious Debanking by OCC