ZION to Strengthen Its Capital Position in the Forthcoming Quarters
Analysts at SunTrust Robinson Humphrey maintain their “buy” rating on Zions Bancorporation (NASDAQ: ZION), while raising their estimates for the company. The target price is set to $24.
ZION has announced an exchange offer for $140 million in floating-rate preferred shares. This exchange offer is likely to boost ZION’s TCE, according to SunTrust Robinson Humphrey. ZION has also entered into futures contracts with Fed Funds to strengthen the asset sensitivity of its balance sheet ahead of a potential rate hike, SunTrust Robinson Humphrey adds.
SunTrust Robinson Humphrey believes that Zions Bancorporation would strengthen its capital position slowly in the forthcoming quarters. ZION’s shares have significant upside potential due to the company’s core earnings power, superior footprint and the possibility of ZION becoming a preferred bank consolidator in Western US, according to SunTrust Robinson Humphrey.
The EPS estimates for 2009 and 2010 have been raised from -$10.97 to -$10.96 and from -$3.19 to -$3.03, respectively, to reflect reduction in preferred stock dividends.
