Financial analysts are forecasting that Zions Bancorp’s stock will continue to rise — as it did Friday — nearly two months after its price plunged amid banking alarms.
Shares in the Utah-based lending institution had risen to $23.76 as of Friday’s close, a 19.2% jump over Thursday’s closing price.
The uptick comes as JPMorgan upgraded Zions from underweight to overweight. That means analysts believe the stock will do well and boost returns in coming months.
James Abbott, Zions’ director of investor relations, said it’s “extremely rare” for analysts to upgrade from sell to buy.
The report from JPMorgan indicates analysts did so because of “the large disconnect this week in ZION shares’ relative performance despite the fundamentals of the business remaining intact” since the bank’s earnings report for the first quarter of 2023.
Analysts also note factors around trades indicate that “investors (as well as short sellers) may be too bearish.”
The regional bank’s average projected stock price for April 24, 2024, was pegged $38.88, according to the financial research site Fintel. That’s 95.1% higher than Thursday’s closing price of $19.93.
If Zions meets projections, its stock still won’t rebound to its previous value after prices fell dramatically in late February and early March. At that time, the bank’s stock price tanked from around $50 a share to less than $30, and it’s plunged more since mid-April.
Zions has taken other hits as well, from earnings falling below the Wall Street mark to Moody’s Investors Service downgrading the bank’s credit rating. Zions’ leaders sought to reassure investors after the earnings report and downplayed the Moody’s downgrade. Bank executives noted that three other major credit rating agencies left Zions’ rating unchanged.
“We’re on record saying that we felt the Moody’s downgrade was inconsistent with the financial condition of our company,” Abbott said, “and we expressed that vocally.”
Regional banks across the country have been trying to convince the general public that they’re financially sound.
They’ve also displayed confidence in their own stock. Regulatory filings show Zions executives recently spent close to $2 million investing in the bank’s failing stock, The New York Times reported and Abbott confirmed.
