Keefe, Bruyette & Woods has reiterated its Market Perform rating on Zions Bancorp (NASDAQ: ZION) with a price target of $75, unchanged from its prior adjustment. The firm cited low credit costs as a key support for an expected earnings per share beat, even as higher expenses and a decline in net interest income weigh on near-term performance.
The rating follows a meeting between Keefe Bruyette’s team and Zions Bancorp’s executive leadership, where management emphasized priorities including positive operating leverage, disciplined risk-adjusted growth, and capital flexibility. The stock currently trades at 10.0x the firm’s 2027 earnings estimate, aligning with the valuation multiple of small and mid-cap peers with $50 billion to $100 billion in assets. Zions Bancorp’s projected return on tangible common equity for 2027 stands at 13.2%, below the peer average of 16.1%.
Competitors have adjusted their outlooks for Zions Bancorp in recent weeks. DA Davidson raised its price target to $84, citing confidence in the bank’s ability to achieve significant pre-provision operating leverage by 2026, with revenue expected to reach the upper end of guidance. TD Cowen increased its target to $73 while maintaining a Hold rating, citing concerns over net interest income guidance. Stephens lowered its target to $80, attributing an earnings beat to lower loan loss provision expenses and strong fee income, though it noted a shortfall in net interest income.
Zions Bancorp’s shares trade at a price-to-earnings ratio of 8.68, according to InvestingPro analysis, which flags the stock as undervalued relative to its fair value. The company has also extended its dividend growth streak to 13 consecutive years.
Separately, Bank of America revised its estimate for aggregate AI capital expenditure by the six largest hyperscalers, increasing its projection by 17% month-over-month to $3.6 trillion through 2028. Annual hyperscaler capex is forecast to reach $800 billion in fiscal 2026 and potentially exceed $1 trillion in fiscal 2027.
