Analyst Manan Gosalia from Morgan Stanley maintained a Hold rating on Zions Bancorporation National Association and keeping the price target at $70.00.
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Manan Gosalia has given his Hold rating due to a combination of factors surrounding Zions Bancorporation’s recent financial disclosures and market reactions. The company recently announced a $60 million credit charge related to two commercial and industrial loans, which led to a significant drop in their stock price by 13%. This charge is seen as an isolated incident, and while it represents a notable impact on earnings, it does not indicate a broader systemic issue within the bank.
Despite the immediate negative reaction, Gosalia believes the market’s response was excessive. Zions Bancorporation has one of the lowest exposures to non-deposit financial institutions (NDFI) among its peers, which suggests limited additional risk. The upcoming earnings call is expected to provide further clarity, and while there is potential for additional charges following an independent review, the overall risk is considered manageable. Thus, a Hold rating is deemed appropriate as the situation develops.