U.S. Bancorp Q2 EPS Surpasses Expectations, Revenue Falls Short

U.S. Bancorp reported Q2 non-GAAP EPS of $1.11, beating expectations by $0.04. Revenue of $7B missed estimates by $50M, a 1.9% YoY increase. The bank's return on tangible common equity was 18.0%, return on average assets was 1.08%, and efficiency ratio was 59.2%.

U.S. Bancorp (NYSE: USB) released its Q2 2025 earnings on July 17, 2025, with mixed results that have sparked varied reactions from analysts. The company reported non-GAAP EPS of $1.11, beating expectations by $0.04. However, revenue of $7 billion missed estimates by $50 million, a 1.9% year-over-year (YoY) increase. The bank's return on tangible common equity was 18.0%, return on average assets was 1.08%, and efficiency ratio was 59.2%.

Analysts were mixed in their reactions to the earnings. While some appreciated the EPS beat, others were concerned about the revenue miss. John McDonald of Truist Securities maintained a Hold rating and raised the price target from $48 to $50, citing the EPS beat but noting the revenue miss [2]. Raymond James analyst Michael Rose upgraded the stock from Outperform to Strong Buy and increased the price target from $51 to $57, highlighting the EPS growth and strong operational performance [2]. Morgan Stanley analyst Betsy Graseck maintained an Overweight rating and raised the price target from $50 to $51, acknowledging the EPS growth but noting the revenue miss [2].

The earnings report comes amidst a challenging macroeconomic environment and ongoing geopolitical tariff discussions. U.S. Bancorp's CEO, Gunjan Kedia, emphasized the importance of maintaining margins while aligning with market volumes. The bank also anticipates increased share repurchases as they approach a 10% capital level on a Category II basis. This strategic positioning aims to bolster client relationships and secure long-term growth.

U.S. Bancorp's peers in the diversified banks segment have shown mixed performance. Citigroup delivered year-on-year revenue growth of 8%, beating analysts’ expectations by 3.5%, while JPMorgan Chase reported a revenue decline of 10.5%, topping estimates by 2.9% [1]. Positive sentiment among investors in the diversified banks segment has been reflected in share prices, with an average increase of 8.3% over the last month [1].

Looking ahead, U.S. Bancorp is expected to report stable net interest income between $4.1 billion and $4.2 billion, alongside non-interest income of approximately $2.9 billion. The company's strategic focus on affluent customer segments and expanding its payments franchise is anticipated to drive growth [4].

References:
[1] https://finance.yahoo.com/news/u-bancorp-usb-q2-earnings-030337159.html
[2] https://www.benzinga.com/analyst-stock-ratings/price-target/25/07/46460703/top-wall-street-forecasters-revamp-u-s-bancorp-expectations-ahead-of-q2-earnings
[4] https://www.ainvest.com/news/bancorp-pref-adr-usbprh-2025q2-earnings-preview-upside-strong-eps-growth-2507/