Citi Raises PT To $27 On ZION

Citi has raised its price target on Zions Bancorporation ZION from $23 to $27 based upon strong 1Q11 earnings. Says Citi, in its report, “Given the significant improvement in credit trends and the outlook of continued improvement, we are revising our 2011 EPS from $0.05 to $0.30. We lowered our 2012 EPS to $1.50 from $1.60 due to the expectation that reserve releases will be larger in magnitude this year versus next year. Our 2013 estimate remains unchanged at $2.45. We are also increasing out target price from $23 to $27 due to the impact of the earnings and capital improvement (Tier 1 Common improves to 9.27% from 8.95% last quarter) have on our valuation as well as lowering our estimated cost of capital for ZION due to the return to profitability and higher probability that ZION may be in position to repay TARP without substantive dilution as soon as 2Q reduces the company's ultimate risk.” Citi maintains its Hold rating on the stock. ZION closed at $22.96 yesterday.