Oppenheimer raised the firm’s price target on U.S. Bancorp to $59 from $57 and keeps an Outperform rating on the shares. While USB has long steadily ground out some of the industry’s best returns, the trends in net interest income and operating leverage have been adverse over the past five quarters, the firm notes. NII declined for four straight quarters between Q1 2023 and Q1 2024, down a total of 14% before turning a 0.9% quarter-over-quarter gain in Q2 2024. This was followed by a 1.7% quarter-over-quarter gain in Q3 2024. Operating leverage had been negative for five consecutive quarters, but adjusting for a securities portfolio restructuring loss of $119M, it was a positive 0.3%, Oppenheimer notes. It is just two quarters of NII growth and one quarter of positive operating leverage, but the firm think there is good reason to expect it continues.

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