Despite such strong performance, USB trades at only a slight P/E premium to many large banks that have much weaker earnings.
Stifel Nicolaus analyst Christopher Mutascio on Monday
U.S. Bancorp and
-- which has had similar recent earnings performance and trades even lower to earnings estimates -- to "buy" from "hold."
The analyst's price target for U.S. Bancorp is $39, implying 14% upside from Monday's close. His price target for Wells Fargo is $42, implying 19% upside from that company's closing price of $35.26 on Monday. Meanwhile, Stifel Nicolaus downgraded
Fifth Third Bancorp
to "hold" based on the stock's relatively high valuation to his firm's earnings estimates.
Mutascio also downgraded
to "sell," citing limited earnings catalysts and valuations nearly in line with those of U.S. Bancorp and Wells Fargo.
The analyst said in his report that "the market is allowing investors to purchase low-risk franchises with strong management teams that are generating profitability ratios well in excess of the industry's average at 'no extra charge.' So why not take advantage of what the market is giving us?"
-- Written by Philip van Doorn in Jupiter, Fla.
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