Zions Bancorp: Steady growth with attractive valuation

Company Zions Bancorporation $ZION this year has seen 16% growth and trades for eleven times earningswhich is well below the average multiple of the S&P 500. This indicator suggests that the stock is undervalued, especially relative to its average multiple, which has been two-thirds of the market valuation over the past decade.

Growth outlook to 2026

The company expects its annual revenues to grow at a rate of nearly 4%, which will bring total revenue of USD 3.3 billion by 2026. While traditional banking and lending services are experiencing slower growth, the asset management is expected to grow at a faster rate 7% per annumand is expected to reach USD 70 million.

Net interest margins and earnings outlook

The following remain important indicators net interest marginsi.e. the percentage of interest income that the bank retains as profit. The growth in margins is expected to support the bank's higher profitability. Even if there is a slight increase in costs, such as wages, this is not expected to significantly weaken overall profitability. Earnings per share (EPS) is expected to grow at a rate almost 6% per annum and reach USD 5.10.

Dividends and total return

The Company is able to continue to increase its dividend due to these positive trends, making the stock attractive to investors seeking regular income. It is estimated that the share price could be in the range of mid-50s, which, together with the expected dividend, could yield a total return of 12 %.

Expected third quarter

In addition, investors are looking for results for third quarterdue to be announced on Monday. Confirmation of a positive profitability outlook could provide further impetus to share price appreciation and another reason to continue buying.