Zions Bancorporation (NASDAQ: ZION) has a healthy core deposit base, which Raymond James says should allow it to maintain a lower deposit beta than peers. The company should be able to record consistent mid-single digit loan growth and favorable credit metrics, while using its excess capital to repurchase shares.

The Analyst

Raymond James’ David Long maintains a Strong Buy rating on Zions Bancorp, raising the price target from $56 to $57.

The Thesis

Zions Bancorp’s board approved an accelerated repurchase plan for the first quarter, of up to $275 million shares of its common stock, which translates to about 5.5 million shares.

While the estimate was for a substantially lower $164 million in repurchases, Long said the higher authorization is not surprising, with the company having discussed this as a possibility during its earnings call last week.

The analyst raised the EPS estimates for 2019 by 5 cents to $4.38, to reflect the resulting lower share count as well as a slight increase in expected loan growth.

The company’s stock is attractively valued, given “its EPS growth prospects, a relatively safe balance sheet, and improving profitability metrics," Long wrote in the report.

Price Action

Shares of Zions Bancorp traded at $48.72 Monday afternoon.

Related Links:

Earnings Scheduled For January 22, 2019

Benzinga's Top Upgrades, Downgrades For December 17, 2018

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