Piper Sandler lowers Zions Bancorp stock price target on loan issues

Investing.com - Piper Sandler reduced its price target on Zions Bancorp (NASDAQ:ZION) to $59.00 from $62.00 on Thursday, while maintaining a Neutral rating on the stock. The $8 billion market cap bank, currently trading at a P/E ratio of 3.97, has maintained dividend payments for an impressive 55 consecutive years, with a current yield of 3.33%.

The adjustment follows Zions Bancorp’s disclosure that it discovered legal actions taken by multiple banks and lenders against parties connected to two commercial and industrial loan borrowers from its CB&T division.

Upon internal review, the bank uncovered apparent misrepresentations and irregularities related to these loans, prompting Zions to take a $60 million provision for the full relationship and charge off $50 million of the outstanding amount.

Piper Sandler adjusted its third-quarter 2025 earnings per share estimate for Zions to $1.20 from $1.51 to reflect the outsized loan loss provision, while maintaining its fourth-quarter and 2026 estimates at $1.54 and $5.90, respectively.

The research firm’s new price target reflects a 10.0x multiple on estimated 2026 earnings, down from 10.5x previously, representing a slight discount to peers as credit concerns are expected to remain a near-term overhang for the stock.

In other recent news, Zions Bancorporation announced a strong financial performance for the second quarter of 2025, reporting net earnings of $243 million, which marks a 28% increase compared to the same period last year. The company’s diluted earnings per share (EPS) rose to $1.63, up from $1.13 in the previous year. Zions Bancorporation’s net interest margin expanded for the sixth consecutive quarter, reflecting a positive trend for the bank. Despite a modest decline in premarket trading, the stock demonstrated resilience during the trading day. These developments underscore the bank’s financial health and growth trajectory.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.