Erika Najarian, an analyst with Bank of America Merrill Lynch, cut the bank's rating to neutral from buy.
In a note to investors, she said Zions's 2020 outlook, including lower operating leverage, “suggests limited catalysts" to drive a higher multiple.
Najarian said investors are likely expecting a better expense forecast, which partly had
driven the shares to outperform since September.
Zions reported fourth-quarter earnings of $174 million, or 97 cents a share, down from $217 million, or $1.08, in the year-earlier quarter.
During a conference call with analysts Chief Financial Officer Paul Burdiss said the results were hurt by "severance and restructuring charges and the resolution of an operational issue" and helped "by a derivative valuation gain on customer-related interest rate swaps."
"Combined, these factors adversely impacted return on average assets by about 20 basis points and return on average tangible common equity by about 200 basis points," Burdiss said. "We remain focused on continuing to improve balance sheet profitability."
John Pancari, an analyst with Evercore ISI, wrote that the company's fourth-quarter results "did not present new catalysts to drive material upside to fundamentals.”
Pancari cut his 2019 and 2020 earnings estimates in light of a slightly higher expense run rate and lower buybacks. He rates Zions in line with a price target of $53 a share.
Wedbush analyst Peter Winter said that "given the expected pressure in net interest income in 2020 (we are forecasting it will decline 2.7%), it is going to be challenging for Zions to generate positive operating leverage in 2020.”