J.P. Morgan Overweight On U.S. Bancorp

J.P. Morgan Chase & Co. is out with a research report on U.S. Bancorp USB and it has an Overweight rating and a $34 price target on shares. In a note to clients, J.P. Morgan Chase & Co. writes, "USB reported a decent quarter marked primarily by faster improvement in credit trends, seasonal growth in fee income, and strong growth in non-interest bearing deposits. EPS of $0.60 beat our estimate of $0.53 driven primarily by lower loan loss provisions and to a small extent by increased revenues net of higher expenses. Unlike 1Q, management's tone changed on loan growth as sequential loan growth was modestly better than 1Q although commercial loan utilization was down a tad. Expenses were slightly higher than expectations with efficiency ratio flattish. Credit quality should continue to improve as overall credit trends improved in 2Q. NIM compressed less than expected, but will likely be pressured by further growth in securities, although this should not hurt net interest income due to offset from higher earning assets. USB did a small share buyback towards 2Q end, which we expect is likely to accelerate in 2H'11 as capital is growing and Basel 3 capital requirements are likely easily manageable with its strong capital position with Tier 1 common of 8.1% as of 6/30." Shares of USB gained $1.11 yesterday to close at $26.14, a gain of 4.43%.