Is U.S. Bancorp (USB) overvalued?
On Equity Rank's model estimate, USB trades close to its fair value (6% above it). U.S. Bancorp (USB) last closed at $59.45; the multi-method model fair value is $55.87.
| Price | Model fair value | Price vs model |
|---|---|---|
| $59.45 | $55.87 | 6% above |
What the answer rests on
- 3 of 13 valuation methods put USB's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, USB's free cash flow would need to grow about -0.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -27.7% a year.
- USB trades at 11.9 times its last year's earnings, against a median of 12.2 for 253 profitable Banks companies.
- Over the past year the price sat below the model fair value on 12% of trading days. The gap ranged from 6% below to 14% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind USB's fair value · What prices assume · Other companies