Zions Bancorp (ZION)
has enjoyed an ongoing recovery trade this year, alongside many other
lower-quality banks, as investors have turned to names where improved
capital and cost structures could lead to earnings growth in the face of
poor loan growth and spread trends. I happen to think that many of
these investors are giving this bank a little too much credit; the
recovery trade idea has certainly worked out (Zions has clearly
outperformed other bank stocks like U.S. Bancorp (USB) and Wells Fargo (WFC)),
but won't last forever. In particular, absent a significant increase in
interest rates (and relatively soon), I think it will be difficult for
this bank to continue outperforming its regional and market cap peers.
Please follow this link to the full article:
Higher Rates Can't Come Fast Enough For Zions Bancorp
No comments:
Post a Comment