UPDATE: Compass Point Resumes Coverage on Zions Bancorporation with Neutral Rating, $31 PT Following 2Q13 Results

In a report published Tuesday, Compass Point analyst Kevin Barker resumed coverage on

with a Neutral rating and $31.00 price target. In the report, Compass Point noted, “We are re-establishing coverage of Zions Bancorporation (ZION) and transferring to Kevin Barker as a result of a reallocation of resources. We re-establish a Neutral rating and a new price target of $31 following the release of 2Q13 results. ZION has outperformed regional bank peers by 16% year-to-date primarily due to the assumption that with interest rates moving up, the bank will see increased earnings due to the implied asset sensitivity. ZION does screen as being the most asset sensitive regional bank and due to the presumption that rates are likely to move higher some time in the next 2-3 years, the bank will likely continue to command a higher earnings multiple compared to peers. Also, the bank should be able to increase profit margins and subsequently, increase earnings through the refinancing of high cost debt and trust preferred securities. With that being said, we believe the stock has effectively priced in a 200 bp parallel upward shift in the yield curve and we would need the company to either show outsized loan growth or some other company-specific initiative to justify a higher valuation.” Zions Bancorporation closed on Monday at $30.84.