Zions Bancorp (ZION) Stock Forecast & Price Target

Zions Bancorp demonstrated a positive financial trajectory as net interest income rose by 1.6% sequentially to $683 million, driven by an expansion in the net interest margin (NIM) to 3.31%. Loan growth accelerated with a 4% annualized increase, while deposit balances also saw a 1.0% sequential rise, indicating a healthy liquidity position. Additionally, the bank's outlook for core customer fee growth is moderately increasing, supported by stable customer-related income and favorable trends in capital markets revenue.

Zions Bancorp has faced several challenges that contribute to a negative outlook, particularly highlighted by its exposure to the oil and gas sector, which poses risks due to fluctuating commodity prices and potential increases in loan losses. Additionally, despite a slight decrease in non-performing assets and a reduction in net charge-offs, the bank's loan loss provision remains significantly lower than in previous quarters, raising concerns about credit quality amidst a backdrop of slower loan growth expectations. Lastly, increased marketing expenses, including an unexpected $15 million charitable donation, have further strained profitability at a time when overall operational costs have only seen minor reductions.