UBS Cuts Price Target on Zions Bancorp (ZION) as Increased Provision Forecast Pushes Energy Concerns
UBS reiterated a Sell rating on Zions Bancorp (NASDAQ: ZION), and cut the price target to $20.00 (from $28.00), following the company's 4Q earnings report. ZION reported 4Q EPS of $0.43, 2c above consensus. ZION guided to roughly $100 million in provision expense for 2016, which equals the high end of their expected 2016 losses in the energy portfolio if oil remains at $30 through the year.
Analyst David Eads commented, "The metrics in ZION's energy portfolio are generally in line or better than most peers that have reported thus far, but we expect the increased provision outlook will do little to ease concerns. While we agree that ZION's current valuation prices in a very high level of losses in the energy portfolio, it remains unclear when investors will step in until we get greater confidence that credit is not deteriorating in the energy portfolio and other Houston exposures."
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Shares of Zions Bancorp closed at $20.39 yesterday.