On Tuesday, Keefe, Bruyette & Woods showed confidence in Zions Bancorp (NASDAQ:ZION) shares by raising the price target on the company's stock to $56.00 from $53.00. This adjustment reflects the bank's strong performance and disciplined expense management, which is expected to result in positive operating leverage by 2025.
The firm has maintained a Market Perform rating on Zions Bancorp's shares. The analyst's assessment was based on the bank's solid pre-provision net revenue (PPNR) beat, which has led to an increase in the earnings estimates for 2025 and 2026 by 5%. The revision acknowledges the bank's ability to manage costs effectively.
Zions Bancorp's strategy for cost control is anticipated to contribute to its financial improvement over the next few years. Despite this positive outlook, the analyst noted that continued credit migration and normalization might offset some benefits that the positive earnings per share (EPS) revisions could have on the stock's performance.
The analyst's statement highlighted the balance between the positive developments in earnings and the potential challenges ahead. "Solid PPNR beat, and we are raising our 2025/2026E each by 5% to reflect strong expense discipline, which should yield positive operating leverage in 2025.
Continued credit migration/normalization, however, could mitigate some portion of the positive impact on the stock from the positive EPS revisions, in our view. Maintain Market Perform; raising PT to $56."
Investors and stakeholders of Zions Bancorp have been given a new price target to consider as they monitor the company's progress and financial health in the forthcoming years. The bank's focus on expense discipline appears to be a key factor in its strategy for sustained growth and profitability.
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