Zions: Looking More Interesting As The Scene Shifts From Recovery To Growth

 

I shifted from bullish to neutral on Zions Bancorporation (ZION) with the bank’s fourth quarter 2020 earnings mostly because I saw more exciting opportunities elsewhere, and until this second quarter report, the performance basically tracked the regional bank average. Even with the outperformance since earnings, the outperformance versus that index is only about three points. Given the “coiled springs” I see in some of Zions’ earnings drivers, I’m thinking it may time to be more bullish again.

Zions is very asset-sensitive, one of the most rate-sensitive banks I follow, and that means a lot is riding on higher interest rates down the road. Beyond that, though, Zions seems to be doing well with turning Paycheck Protection Program customers into long-term clients, and I like the opportunity Zions has to leverage an upgraded and refreshed IT infrastructure at a time when many regional rivals of similar size are still using older, less capable systems. With a double-digit annualized return potential, I think this is a name to consider.

 

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Zions: Looking More Interesting As The Scene Shifts From Recovery To Growth