Zions Bancorp just downgraded at Baird, here’s why

Baird downgraded Zions Bancorp to Neutral from Outperform with an unchanged price target of $45. Given the significant outperformance by bank stocks over the last several weeks, the risk/rewards are “deteriorating at the margin,” the analyst tells investors in a research note. The firm still sees value in the broader group, but downgraded both Zion and U.S. Bancorp. The banks are under-earning on spread income and net interest margin normalization will provide earnings upside over the intermediate term, but this is starting to be reflected in these prices, says Baird.