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On Tuesday, DA Davidson revised its price target for Zions Bancorp (NASDAQ:ZION), reducing it from $62.00 to $57.00, while reaffirming a Buy rating on the shares. The adjustment follows a review of the company’s financial outlook, which has become slightly more guarded due to softer loan demand and diminished capital markets activity. Trading at a P/E ratio of 8.8x and having declined nearly 19% year-to-date, the $6.4 billion bank appears undervalued according to InvestingPro analysis.
The research firm highlighted that despite these challenges, Zions Bancorp’s management is still projecting positive operating leverage in the range of 1-2% for the first quarter of 2026 compared to the same period in 2025. The company plans to manage expenses effectively to achieve this target. InvestingPro data shows the bank maintains a "GOOD" overall Financial Health Score, supported by strong relative value metrics.
DA Davidson’s report also noted that after two quarters of significant increases in classified and criticized loans, the growth rate of such loans has decelerated. Management at Zions Bancorp believes that leading credit metrics are nearing their peak. Furthermore, they anticipate that the overall content of losses will remain low.
The firm’s decision to maintain a Buy rating suggests confidence in Zions Bancorp’s strategic measures to navigate the current economic environment. The report concluded with DA Davidson affirming its positive stance on the company’s stock but with a revised price target reflecting the updated revenue outlook and prevailing market conditions.
In other recent news, Zions Bancorporation reported first-quarter 2025 earnings that did not meet analyst expectations. The bank announced net earnings applicable to common shareholders of $169 million, or $1.13 per diluted share, which was below the analyst estimate of $1.19 per share. Despite this, the earnings represented an 18% increase from the same quarter last year, where earnings were $143 million, or $0.96 per share. The results were influenced by an $0.11 per share charge to income tax expense due to a change in Utah tax law, which the company expects to gradually recover over time. Additionally, Zions Bancorporation completed the acquisition of four branches in California’s Coachella Valley from FirstBank of Denver, adding approximately $630 million in deposits and $420 million in loans to its portfolio. Credit quality remained stable, with nonperforming assets at 0.51% of loans and leases, consistent with the previous quarter. Annualized net charge-offs were reported at 0.11% of loans and leases. The company’s CEO, Harris H. Simmons, noted economic uncertainty but expressed confidence in the bank’s credit culture and reserves.
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