U.s. Bancorp Stock Fair Value Calculation – U.S. Bancorp Surrenders China IPO Mandates

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U.S. ($NYSE:USB) Bancorp, one of the top five largest financial services holding companies in the United States, recently decided to surrender its mandates for China IPOs. The move follows the Trump administration’s ban on U.S. companies investing in Chinese companies that are believed to have ties to the military. U.S. Bancorp is the first of many expected to follow suit in the coming weeks, as other U.S. banks are expected to relinquish their IPO assignments in China. The decision to relinquish China IPO assignments marks a change in U.S. Bancorp’s strategy. By surrendering its China IPO mandates, U.S. Bancorp is sending a clear message that it does not support any investments with ties to the Chinese military-industrial complex.

Price History

On Tuesday, U.S. Bancorp (NYSE: USB) announced that it was surrendering the mandate to handle the Chinese Initial Public Offerings (IPO) of three state-owned enterprises. This news came shortly after the stock opened at $33.0, and closed at $33.6, up by 0.4% from last closing price of 33.4. The decision to pull out its mandate was made after U.S. Bancorp conducted due diligence and determined that the Chinese companies did not meet its standards for public offerings. It is reported that U.S. Bancorp was not alone in this decision, as other global banks such as JPMorgan Chase & Co also decided to drop their mandates too.

In the past, U.S. Bancorp had handled large IPOs such as Tencent Holdings and JD.com, both of which have seen great success in the stock market. This recent move by U.S. Bancorp may be a sign of caution as the company continues to evaluate new investments in China’s markets. Live Quote…

About the Company

Income Snapshot

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Cash Flow Snapshot

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Balance Sheet Snapshot

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Key Ratios Snapshot

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Analysis – U.s. Bancorp Stock Fair Value Calculation

At GoodWhale, we have examined the fundamentals of U.S. BANCORP to determine its fair value. After careful consideration, our proprietary Valuation Line has estimated the fair value of U.S. BANCORP share to be around $37.7. Currently, U.S. BANCORP stock is trading at $33.6, indicating that it is undervalued by 10.8%. This presents an opportunity for potential investors to buy into U.S. BANCORP at a lower price than its true worth. Therefore, we believe that now is the ideal time to invest in U.S. BANCORP for gaining maximum returns. More…

Peers

U.S. Bancorp is one of the largest banks in the United States and offers a variety of banking products and services to its customers. Hamlin Bank and Trust Co, Adirondack Trust Co, and Susquehanna Community Financial Inc are all competitors of U.S. Bancorp.

– Hamlin Bank and Trust Co ($OTCPK:HMLN)

Hamlin Bank and Trust Co is a regional bank headquartered in Pennsylvania. The bank has 58 branches and offers a full range of banking services to retail and commercial customers. As of December 2020, Hamlin Bank and Trust Co had assets of $2.5 billion and deposits of $1.9 billion.

– Adirondack Trust Co ($OTCPK:ADKT)

The company’s market cap is 33.64M as of 2022 and its ROE is -1.3%. The company is a provider of financial services to the Susquehanna Valley region of Pennsylvania. The company offers a full range of banking, lending, and investment services to its customers. It also operates a network of ATM locations.

Summary

U.S. Bancorp, a large banking conglomerate, has recently made the decision to give up a number of its Initial Public Offering (IPO) mandates in China. This decision follows an overall trend of U.S. banks reducing their involvement in Chinese IPOs due to regulatory concerns. Analysts are predicting that this shift away from Chinese IPOs will have a limited impact on the company’s profits, as the majority of U.S. Bancorp’s revenue is derived from traditional banking operations in the United States.

In the short term, investors are advised to take a “wait and see” approach to the stock as the implications of this move remain unclear. Over the longer-term, U.S. Bancorp’s strong balance sheet and focus on domestic banking should offer investors steady returns and stability.