ZION - Zions cut at J.P. Morgan as recent bounce corrects mispricing
2023-07-24 09:23:59 ET
Zions Bancorporation ( NASDAQ: ZION ) stock slipped 1.7% in Monday premarket trading after being downgraded to Neutral from Overweight at J.P. Morgan with outsized upside potential no longer in sight following a recent rally.
Last week, shares of the regional lender spiked after its stronger-than-expected Q2 earnings reflected a solid rebound in customer deposits.
ZION jumped 17.3% over the past five sessions and 30.4% M/M, but still off 25.5% since the start of 2023. The stock has a Momentum Grade of "D," although its three-month price performance surpasses that of the sector median by a factor of more than 3x.
"From the current valuation and with the deposit story now on more stable footing, we now see upside potential in ZION as now being in the range of peers," analyst Janet Lee wrote in a note.
The stock is trading at 1.2 times 2024 estimated tangible book value, or a 5% premium to peers, Lee noted.
ZION was one of four regional bank stocks that rose the most among financial stocks last week, as investors cheered lenders' deposit growth for the second quarter.
The Neutral rate aligns with the SA Quant system rating of Hold and diverges from the average sell-side analyst rating of Buy.
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Zions cut at J.P. Morgan as recent bounce corrects mispricing