2024-04-23 03:48:43 ET
Summary
- U.S. Bancorp's shares dropped after disappointing first-quarter earnings.
- A rising credit provisioning trend was a negative, as was a cut NII outlook for FY 2024.
- A changing interest rate environment should lead to valuation headwinds for USB.
U.S. Bancorp's ( USB ) shares skidded after the release of the bank's first-quarter earnings report due to rising credit provisions and headwinds to net interest income. Additionally, U.S. Bancorp cut its guidance for full-year net interest income by half a billion dollars. While the market has come to terms with the fact that rising inflation will likely prevent sharp federal fund rate cuts in the short term, the guidance cut strongly indicates that U.S. Bancorp is looking at much weaker NII prospects going forward… which I expect will continue to be a drag for the lender's valuation in FY 2024....
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U.S. Bancorp: Headwinds Persist