Why U.S. Bancorp Shares Will Fly Above $50

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of US Bancorp (NYSE: USB  ) traded flat today after Nomura Securities initiated coverage on the banking giant with a buy rating.

So what: Along with the bullish call, analyst Bill Carcache planted a price target of $51 on the stock, representing about 26% worth of upside to yesterday's close. So while contrarian traders might be turned off by US Bancorp's price strength over the past year, Carcache's call could reflect a sense on Wall Street that the bank's growth tailwinds give it plenty of room to run.

Now what: According to Nomura, US Bancorp's risk/reward trade-off is rather attractive at this point. "Best-in-class operating efficiency, industry-leading fee income generation, and low levels of excess capital drive USB's 20%-plus returns, which we view as repeatable and sustainable," said Carcache. "Overall, we see upside to 2015 estimates and expect the shares to continue to grind their way higher in the coming quarters." With US Bancorp shares trading at a clear price-to-book premium to the banking sector, however, I'd hold out for a wider margin of safety before betting on that bullishness. 

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