On Tuesday, Piper Sandler maintained a Neutral rating on Zions Bancorp (NASDAQ:ZION), with a price target of $51.50.
The firm's analyst commented on the company's recent financial performance, noting that Zions Bancorp reported operating earnings per share (EPS) of $1.36, which surpassed the consensus estimate of $1.17 and Piper Sandler's own estimate of $1.16. The better-than-expected results were attributed to a combination of factors, including a lighter loan loss provision (LLP), which contributed an additional $0.08 to the EPS. Additionally, non-interest expense (NIE) and net interest income (NII) were higher than anticipated, adding $0.06 and $0.04 to the EPS, respectively.
The company's pre-provision net revenue (PPNR) was also highlighted, coming in at $0.10 or 7% above the Street's expectations. Despite the stronger PPNR, the analyst pointed out that some potential upside might be limited due to negative migration in classified assets.
In other recent news, the bank also announced plans to acquire four FirstBank branches in California, pending regulatory approval. This development was followed by RBC Capital Markets, Baird, Stephens, and Citi revising their stock targets for Zions Bancorp upwards while maintaining neutral ratings.
These adjustments were based on Zions Bancorp's robust core trends, favorable revenue trends, well-managed expenses, and the bank's consistent performance. Despite some negative risk migration in multifamily and commercial classifieds, analysts highlighted that credit costs remain low, and the bank's credit quality remains strong.
InvestingPro Insights
Zions Bancorp's recent financial performance, as highlighted in the article, aligns with several key insights from InvestingPro. The bank's ability to surpass earnings estimates is reflected in InvestingPro Tips, which indicate that analysts have revised their earnings upwards for the upcoming period and predict the company will be profitable this year. This positive outlook is further supported by the bank's profitability over the last twelve months.
InvestingPro Data shows that Zions Bancorp has a P/E ratio of 12.01, suggesting the stock may be reasonably valued relative to its earnings. The bank's revenue for the last twelve months stands at $2,955 million, with an impressive operating income margin of 34.72%. These figures underscore the strong PPNR performance mentioned in the article.
Notably, Zions Bancorp has maintained dividend payments for 54 consecutive years and has raised its dividend for 11 consecutive years, as per InvestingPro Tips. This demonstrates the bank's financial stability and commitment to shareholder returns, which may be appealing to income-focused investors. The current dividend yield is 3.32%, providing a steady income stream.
While the article mentions potential concerns about asset quality, it's worth noting that Zions Bancorp has shown a high return over the last year, with InvestingPro Data revealing a 1-year price total return of 71.91%. This impressive performance suggests that the market has been responding positively to the bank's overall financial health and operational efficiency.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 7 more InvestingPro Tips available for Zions Bancorp, which could provide further context for the bank's financial position and future prospects.
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