Banks - Regional · NYSE
Current Price
$56.17
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on U.S. Bancorp with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
U.S. Bancorp, a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities and other financial institutions in the United States. It operates in Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support segments. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; lending services, such as traditional credit products; and credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate and governmental entity customers; and a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, the company offers investment and insurance products to its customers principally within its markets, as well as fund administration services to a range of mutual and other funds. Further, it provides corporate and purchasing card, and corporate trust services; and merchant processing services, as well as investment management, ATM processing, mortgage banking, insurance, and brokerage and leasing services. As of December 31, 2021, the company provided its products and services through a network of 2,230 banking offices principally operating in the Midwest and West regions of the United States, as well as through on-line services, over mobile devices, and other distribution channels; and operated a network of 4,059 ATMs. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota.
ROIC (TTM)
4.7%
ROE (TTM)
12.2%
FCF Yield
9.12%
Based on trailing twelve-month data, USB shows a free cash flow per share of N/A and a ROIC of 4.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 9.12% are important context metrics when evaluating USB's stock valuation relative to peers.
The intrinsic value of USB depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether USB is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $56.17. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on U.S. Bancorp: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Banks - Regional industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting USB's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For U.S. Bancorp, this means projecting how much free cash flow the Banks - Regional will produce over the next 5-10 years, then discounting those amounts to today's dollars. USB's ROIC of 4.7% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For USB, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
