JPMorgan analyst Anthony Elian downgraded Zions Bancorp (NASDAQ: ZION) from Neutral to Underweight with a price target of $75.00.

The analyst comments: “We are downgrading ZION shares to Underweight. Heading into this earnings season, we were cautious on regional banks tied to a view that deposit cost competition will intensify from already elevated levels, and specifically on ZION the stock was our lowest rated Neutral in our rank order of our coverage universe heading into earnings. With the next move (or two) from the FOMC likely being a hike, this has the impact of pressuring regional banks’ deposit costs higher before they see the benefit of assets repricing higher. As a result, we see banks that exhibit a profile of below-peer deposit costs while still seeing decent loan growth—Zions falls into this group—as being more at risk of seeing the steepest increases in deposit costs over the near term. Consequently, for Zions we are biased toward a more pronounced uptick in deposit costs particularly given the company’s deposit costs are still below that of the average regional bank and the expectation that loan growth will persist which will likely require funding this loan growth with incrementally more expensive deposits. As a result, while we still expect the NII dollars to increase through 2027, we anticipate growth occurring at a slower pace than we forecasted heading into earnings tied to our view that deposit costs will continue to pace higher. When we combine our updated estimates with last night’s after-hours price of ~$70, we find ZION shares trading at about ~11x 2027e EPS or what we view as a steep 10% premium to our coverage, despite a growth outlook (balance sheet, top line, bottom line) that is only expected to trend in the ballpark of peers.”

For an analyst ratings summary and ratings history on Zions Bancorp click here. For more ratings news on Zions Bancorp click here.

Shares of Zions Bancorp closed at $71.89 yesterday.