What Happened?
Shares of financial services giant U.S. Bancorp (NYSE: USB) jumped 3.2% in the morning session after an analyst at Barclays raised the price target on the company's stock to $65 from $56.
The analyst, Jason Goldberg, also maintained an "Overweight" rating on the shares. This type of rating suggested a belief that the stock could outperform the average return of other stocks in its sector. The substantial increase in the price target signaled a more positive outlook on the bank's future performance from the analyst.
After the initial pop the shares cooled down to $55.94, up 3.7% from previous close.
Is now the time to buy U.S. Bancorp? Access our full analysis report here.
What Is The Market Telling Us
U.S. Bancorp’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 4.5% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium.
Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
U.S. Bancorp is up 3.7% since the beginning of the year, and at $55.94 per share, has set a new 52-week high. Investors who bought $1,000 worth of U.S. Bancorp’s shares 5 years ago would now be looking at an investment worth $1,209.
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