Hovde Group has initiated coverage on Zions Bancorporation (NASDAQ:ZION) with an Outperform rating and a price target of $40.00. The firm believes that Zion’s operational playbook and historically lower-than-peer deposit beta position the company well for the volatile economic landscape. Despite its conservative estimates, the firm confidently recommends the stock due to its significantly discounted share price. Hovde Group believes that the market is incorrectly pricing in a draconian deposit environment and overlooks the looming rapid capital build, supported by earnings and the short duration bond book. Furthermore, the firm believes Zion’s diversified client base likely limits outsized near-term deposit flight.
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