Quick Take on 2Q26 Earnings Result: Revenue-Led Operating Leverage Comes Through

Research evidence excerpt

Quick Take on 2Q26 Earnings Result: Revenue-Led Operating Leverage Comes Through

Update

July 17, 2026 12:04 AM GMT

Morgan Stanley & Co. LLCMU.S. Bancorp | North America Manan Gosalia

Equity Analyst

Quick Take on 2Q26 Earnings Manan.Gosalia@morganstanley.comBen Bayanfar +1 212 761-4092

Research Associate

Ben.Bayanfar@morganstanley.com +1 212 761-0649

Result: Revenue-Led Operating

U.S. Bancorp (USB.N, USB UN)

Large Cap Banks | United States of AmericaLeverage Comes Through

Stock Rating Equal-weight

Industry View Attractive

Price target $67.00

Reaction to earnings Shr price, close (Jul 16, 2026) $64.01

Mkt cap, curr (mm) $99,792

Unchanged Modest upside Modest revision higher 52-Week Range $64.25-43.48

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Beat and raise quarter, with the raise better than expected on

both revenue and positive operating leverage. We take our

estimates ~3% higher this year, and are already above the Street

on 2027 where we hold estimates flat.

Our Key Takeaways:

Revenue driven operating leverage coming through, as positive operating

leverage guide lifted to 300bps (ex-BTIG) vs +200bps+ prior

• USB delivered 400bps of positive operating leverage in 2Q, and lifted the

FY26 operating leverage guide to 300bps+ (ex-BTIG), up ~100bps from

prior. The leverage is increasingly revenue-led rather than expense-led, as

strong fee growth (~10% ex-BTIG) and solid loan growth (+3% Q/Q) drove

NII up 7.5% Y/Y, above the 2Q guidance range.

• On a standalone basis the revenue guide was raised 1% at the midpoint

(better than the high end of the prior guide that we expected coming into

earnings), and inclusive of BTIG it is now 7-9% Y/Y. Our model already baked