ZION: Neutral Signal on Zions Bancorporation Options

Zions Bancorporation, N.A. operates as a bank providing a range of banking products and related services. It serves primarily the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Its core business revolves around commercial and small business banking, capital markets and investment banking, commercial real estate lending, retail banking, and wealth management. The company serves a diverse clientele, including small- and medium-sized businesses, commercial real estate borrowers, and retail customers. Zions differentiates itself by emphasizing local authority and customization through its seven geographically defined 'affiliate banks', each with its own local branding and management teams, and by building long-lasting relationships with customers through competitive products and high-quality service.

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ZION's technical outlook is bearish. The recent price action shows a downtrend, with the price declining from a high around $58 in late August to the current level of $51.445. The price is below its 21-day EMA of 52.95, suggesting continued short-term weakness. The 50-day SMA sits higher at 55.46, reinforcing the downtrend. The MACD at -1.008 is negative and trending downwards, further confirming bearish momentum. The RSI of 43.92 is below 50, indicating that the stock is not yet oversold but has plenty of room to fall. The Stochastic Oscillator shows the %K line at 60.01, and %D at 58.32, suggesting a possible short-term bounce, but this is unlikely to reverse the overall trend. The ADX is at 18.43, showing a weak trend, but the recent ROC of -8.97% indicates significant negative momentum. The Bollinger Bands show the price near the lower band, suggesting the potential for a short-term bounce, but the overall trend is down. Given these signals, a continued downtrend over the next 1-3 months is likely.

Zions Bancorporation's second quarter 2025 MD&A presents a generally positive, albeit complex, operational picture. `Net interest income` increased $51 million, or 9%, driven by lower funding costs and asset growth, leading to a net interest margin improvement to 3.17% from 2.98%. However, interest and fees on loans decreased $2 million. Customer-related noninterest income also rose $11 million, or 7%, boosted by capital markets fees. For the six-month period, `Net cash provided by operating activities` was $117 million, significantly lower than the $512 million in the prior year, indicating a tightening of liquidity. The bank's outlook is cautiously optimistic, as it continues to navigate a fluctuating rate environment and evolving trade policies. The MD&A highlights the bank's focus on managing interest rate risk through derivatives and balance sheet positioning, aiming to reduce volatility in net interest income and economic value of equity. Management also acknowledged the potential impacts of emerging technologies and cybersecurity threats, indicating an awareness of future challenges.

Zions Bancorp's Q2 2025 earnings call presents a moderately bullish outlook. The company reported a 28% increase in net earnings compared to the prior year, signaling strong financial performance. CEO Harris Simmons expressed a more 'sanguine' outlook due to an abatement of tariff-related risks, stating that the economy seems to be 'weathering this in better shape than I think we might have anticipated a quarter ago.' The net interest margin continued to expand for the sixth consecutive quarter, reaching 3.17%. CFO Ryan Richards anticipates moderately increasing net interest income and customer-related fee income for Q2 2026 relative to Q2 2025, driven by earnings asset remix and new client acquisitions. Loan growth is expected to be led by commercial loans. While adjusted noninterest expenses are also projected to increase moderately, the company expects to maintain positive operating leverage. The launch of the consumer gold account offering has seen early success, with a '78% increase in sales...versus the product in its predecessor,' indicating promising growth in the consumer market.

ZION's financial performance presents a mixed but slightly positive outlook. Revenue has shown a general upward trend, starting from $1,188,000,000 in Q4 2023 and reaching $1,253,000,000 in Q3 2025, indicating potential growth. The grossProfitRatio has fluctuated, ranging from 0.602 in Q1 2024 to 0.676 in Q2 2025, before settling at 0.648 in the most recent quarter, suggesting some inconsistency in profitability. Operating cash flow has been volatile. The company reported a negative operating cash flow of -$245,000,000 in Q4 2023, swinging to positive $179,000,000 in Q1 2025, and then dropping back to negative -$62,000,000 in Q2 2025. Unfortunately, the operating cash flow statement is missing for the most recent quarter, Q3 2025. Total debt has increased from $4,543,000,000 in Q4 2023 to $5,230,000,000 in Q3 2025, signaling increased leverage. While revenue is growing, the fluctuating profitability and rising debt warrant caution, and the inconsistency of cash flow generation is a concern.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting effective cost management. Return on Equity (ROE) has improved, showcasing efficient capital allocation. While the Price-to-Earnings (P/E) ratio is elevated, it is potentially justified by the company's growth prospects. The Debt-to-Equity ratio has decreased, reflecting a healthier balance sheet and reduced financial risk. The current ratio is at a healthy level, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable combination of growth, profitability, and balance sheet strength, supporting a positive outlook for the next 12 months, although the high P/E ratio warrants close monitoring.