SMid Portfolio Managers‘ Monthly: U.S. Equity Thematic Research

Research evidence excerpt

SMid Portfolio Managers‘ Monthly: U.S. Equity Thematic Research

our updated estimates with last night’s after-

hours price of ~$70, we find ZION shares trading at about ~11x 2027e EPS or what we

view as a steep 10% premium to our coverage, despite a growth outlook (balance sheet,

top line, bottom line) that is only expected to trend in the ballpark of peers. ZION also

trades at ~1.3x 2027e TBV or nearly a 20% premium which we also view as steep. With

the stock’s 2027e implied cost of equity (ROTE / P/TBV) at ~10%, this is below our

average bank in the ~12% range. As a result, we are downgrading ZION shares to

Underweight.

• Next twelve month outlook: Period-end loans, NII, fee income, and adjusted

expense: each moderately increasing.

• Nuggets from the call: (1) Stability in 2Q26 NIM masked several moving pieces,

including loan spread compression, softer one-month SOFR trends, fading swap

benefits, and ongoing asset remix; (2) Fee-income growth is increasingly broad-

based rather than solely capital-markets driven, with treasury-management revenues,

mortgage-related fees, and wealth-management initiatives expected to become

increasingly meaningful contributors over the coming year.

• EPS revisions: We are decreasing our 2026e, 2027e, and 2028e core EPS estimates

from $6.49, $6.94, and $7.51 to $6.35, $6.60, and $7.07, respectively. We assume a

YE26, YE27, and YE28 fed funds rate of 3.87%, 4.00%, and 4.06%, respectively.

• Downgrade to Underweight. Shares trade at ~11x 2027e EPS or a 10% premium to

peers although we expect key growth metrics to trend in the range of peers. We also

expect total return potential in the ~7% range through YE27 which is below our

coverage universe median in the ~15% range.

Click for link to full report dated July 21, 2026