ZION - Zions Bancorp raised to Outperform at Baird with stock trading near pandemic-era lows

2023-04-05 14:22:34 ET

Baird analyst David George thinks there is "significant upside" in shares of Zions Bancorporation ( NASDAQ: ZION ), upgrading the stock to Outperform from Neutral, as recent banking jitters drove it closer to pandemic-era lows.

With ZION trading at around three time pre-provision net revenue and under five times market cap-to-assets, traders appeared to be "pricing in permanent profitability destruction, which we think is unlikely," George contended, referencing both ZION and a slew of other regional bank stocks that he covers.

He pointed out that the company has screened better than peers in both credit losses and deposit costs on a historical basis, which in turn "should allow the bank to continue executing through-the-cycle."

Although it's vulnerable to mild deposit outflows, George said he has "yet to see anything to justify" ZION's 42% year-to-date swoon.

The stock gained 1.6% in afternoon trading. George's Outperform rating disagrees with the Quant system rating of Sell and converges with the average Wall Street analyst rating of Buy.

In mid-March, Seeking Alpha contributor The Value Investor viewed ZION as a Hold as the company's "unrealized losses are a real cause for concern."

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