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On Wednesday, Citi analysts adjusted their outlook on Zions Bancorp (NASDAQ:ZION), currently trading at $59.03, increasing the price target from $54.00 to $63.00, while retaining a Neutral rating on the stock. The revision reflects the anticipation of a stronger net interest income (NII) trend and a better-than-expected expense base, as indicated by the company's fourth-quarter results of 2024 and the forecast for 2025.
According to InvestingPro data, six analysts have recently revised their earnings expectations upward for the upcoming period.
The analysts noted that Zions Bancorp was a popular investment choice heading into the earnings season, with many investors positioning for what they anticipated would be a longer duration of higher net interest income.
Despite this early optimism, the actual results and the outlook for the next year suggest a modest improvement in NII and a well-managed expense base, which could lead to pre-provision net revenue (PPNR) growth into 2026. The bank's strong fundamentals are reflected in its impressive 54-year streak of maintaining dividend payments, with a current yield of 2.91%.
However, the analysts also observed that the company's projections for loan growth were limited, which could restrain near-term share price movement. Additionally, while the bank is expected to manage its expenses effectively in the coming year, the potential for operational leverage gains appears modest, primarily due to interest rates.
The increase in the price target to $63.00 is an attempt to reflect the recent capture of NII upside. Nonetheless, the cautious growth projections and only slight improvements in operating leverage have led Citi to maintain a Neutral rating, indicating that they are not advocating for a strong buy or sell position at this time.
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