ZION - Zions Bancorporation: No Longer A Bargain (Rating Downgrade)
2024-01-27 01:00:29 ET
Summary
- Zions Bancorporation reported robust earnings for Q4 on Monday, which also beat adjusted EPS estimates.
- The deposit base is fully restored. The credit provision trend looks healthy.
- However, the bank's net interest income continued to decline, posing a risk to future earnings.
- Shares are now trading at a significant premium to book value again, leading to a downgrade in my rating to hold.
Zions Bancorporation, National Association (ZION) submitted a decent earnings sheet for the fourth-quarter on Monday that showed a growing deposit base, no incremental credit provisions, but also a continual decline in the bank's net interest income. A growing deposit base is obviously great for ZION and although the bank is growing its book value, I believe that the risk profile after a major revaluation to the upside no longer makes shares of the regional lender a buy. For those reasons, I am lowering my rating to hold!...
Zions Bancorporation: No Longer A Bargain (Rating Downgrade)