On Wednesday, Evercore ISI updated its outlook on Zions Bancorp (NASDAQ:ZION) shares, raising the price target to $68 from $61, while maintaining an Outperform rating. The firm's increased confidence in the company's fundamental performance was cited as the reason for the adjustment.
The revision follows investor meetings held last week in Boston with Zions Bancorp's CFO Ryan Richards and Head of Investor Relations Andrea Christoffersen. The discussions focused on the bank's net interest income (NII), net interest margin (NIM) dynamics, cost management, credit quality, and regulatory changes expected after the Trump election.
Evercore ISI expressed optimism about Zions Bancorp's potential for a fundamental inflection point, which is anticipated to bolster returns in 2025 and 2026. The bank's NII momentum is expected to persist, supported by improving loan demand and a shift away from conservative deposit pricing. Additionally, revenue growth is likely to benefit from the expansion of capital markets activities and increased wealth management penetration.
The analysis also highlighted Zions Bancorp's efficient expense management, including the completion of a deposit system conversion, which should contribute to efficiency gains. Despite some concerns regarding credit, especially in commercial real estate, the outlook for manageable losses remains positive.
The report pointed out that Zions Bancorp's shares have outperformed the Bank Index (BKX) by 9.5% since the third quarter of 2024 earnings report and by 4.8% since the Trump election. Despite this, the bank's shares continue to trade at a modest discount compared to peers, with a price-to-earnings (P/E) ratio of 12.5 times for 2025, against peers' 12.8 times.
In conclusion, Evercore ISI reiterated its Outperform rating for Zions Bancorp, based on the bank's improving growth and return profile. The firm's estimates for the company remain unchanged at this time, but the price target has been adjusted to reflect higher sector valuations.
In other recent news, Zions Bancorporation (NASDAQ:ZION) has declared a regular quarterly dividend of $0.43 per common share and quarterly cash dividends on its perpetual preferred shares, reflecting its financial health and consistent performance.
The company also reported an impressive operating earnings per share (EPS) of $1.36, surpassing the consensus estimate of $1.17, and a net earnings increase to $204 million. In addition, Zions Bancorp has plans to acquire four FirstBank branches in California, pending regulatory approval.
Several financial firms have adjusted Zions Bancorp's stock target upward due to its strong financial performance. Keefe, Bruyette & Woods raised the price target to $56.00, citing the bank's robust expense management and positive operating leverage expected by 2025.
Similarly, Piper Sandler, RBC Capital Markets, Baird, and Stephens have all revised their stock targets for Zions Bancorp upwards, maintaining neutral ratings.
These revisions come in the wake of Zions Bancorp's impressive financial performance and the bank's strong credit quality, despite some negative risk migration in multifamily and commercial classifieds. Analysts predict stable to slightly increasing loan growth and a 1.4% increase in net interest income in Q3 2025. These recent developments shed light on Zions Bancorp's financial health and future prospects.
InvestingPro Insights
Recent data from InvestingPro reinforces Evercore ISI's optimistic outlook on Zions Bancorp (NASDAQ:ZION). The bank's P/E ratio of 13.69 aligns closely with Evercore's estimate, confirming its relatively attractive valuation compared to peers. This valuation becomes even more compelling when considering Zions' strong performance metrics.
InvestingPro data reveals impressive price total returns, with a 31.69% gain over the last three months and a remarkable 87.82% over the past year. These figures underscore the market's growing confidence in Zions' strategy and potential, as highlighted in Evercore's analysis.
Two key InvestingPro Tips further support the positive outlook. Firstly, Zions "has raised its dividend for 12 consecutive years," demonstrating consistent shareholder value creation. Secondly, "13 analysts have revised their earnings upwards for the upcoming period," aligning with Evercore's expectations of improved performance in the near future.
For investors seeking a deeper understanding of Zions Bancorp's potential, InvestingPro offers 11 additional tips, providing a comprehensive view of the company's financial health and market position.
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