FBR Capital upgraded Zions Bancorp (NASDAQ: ZION) from Market Perform to Outperform with a price target of $36.00 (from $30.00), saying the bank is just about to turn a corner.

Analyst Paul J. Miller commented, "We upgrade shares of ZION to Outperform and increase our price target to $36 from $30. Our rating is predicated on a longer-term view that cost-cutting efforts, the sale of CDOs, and the redeployment of capital could improve the company’s ROTCE to ~9% from 1Q15’s 5.3% level over the next 12 to 18 months. We view this as an opportunity to buy shares around book value with little downside should the company not achieve its targets. Zions also stands to benefit from an increase in the SIFI buffer and/or higher rates, both of which should lead to the company realizing its efficiency goals much faster than we model, providing upside to our earnings scenario. We maintain our FY15 operating EPS estimate of $1.75 and increase our FY16 operating EPS estimate to $2.20 from $2.00. Note that we do not model the benefit to earnings from the company's expected redeployment of capital."

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Shares of Zions Bancorp closed at $27.22 yesterday.