ZIONS BANCORPORATION, NATIONAL ASSOCIATION (ZION): what the price assumes

In the published model solve dated 2026-Q2, anchored at $71.69, ZIONS BANCORPORATION, NATIONAL ASSOCIATION (ZION) is priced for more than 16.3% return on equity. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/ZION

Headline

FieldValue
TickerZION
CompanyZIONS BANCORPORATION, NATIONAL ASSOCIATION
Current price$71.69/sh

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Price-to-book1.46x
Return on equity now12.6%

The implied return on book is non-physical at this price-to-book and is suppressed as misleading. The price sits beyond a 12.6% return on equity sustained for 40 years and is not resolvable as a sustainable-ROE point. The rarity read below is the honest signal.

Solve inputs: computed at a 12.5% cost of equity; ROE searched up to the 12.6% ROE ceiling.

Reconcile: at the x-ray's 9.3% required return this reads ~11.7%; the models below use their own rates.

How unusual the bet is: n/a

ReferenceValue
vs own history+1.29σ
cohort percentile (of 166 peers)63
sustained it ~10 years at this level56%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.86x3justifies
Earnings1.03x1expensive
Relative—0—
Growth1.09x1expensive

Families that justify the price: Asset, Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=5)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$88.680.81xyesTBVPS $49.62 × 1.79x (ROE (TTM) 13.2% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.10% allowance/loans → ×0.93)
Relative ValuationRelative——noP/E 10x (static sector reference · 2026-04), scenarios: 8.5x / 10.0x / 11.5x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth$65.601.09xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$70.731.01xyesBV/sh $49.62, ROE (TTM) 13.2%, ke 9.3%
Two-Stage Excess ReturnAsset$83.710.86xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth——noRev $2.7B, growth 2% (input: historical growth; tapered), Terminal P/S: 3.4x / 4.0x / 4.6x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative——noEPS $6.43, growth 26% (input: historical EPS growth), PEG=0.42 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$84.730.85xyes√(22.5 × EPS $6.43 × BVPS $49.62) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——noEPS $6.43 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative——noEPS $6.43 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$69.511.03xyesEPS $6.43 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (buyback)-0.8%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

At about $66, roughly 1.4 times book value, the price asks Zions to keep earning a return on equity near the top of what regional banks have sustained over decades. Recent results back the demand: first-quarter 2026 diluted EPS came in at $1.56, up from $1.13 a year earlier, with net interest margin at 3.27 percent.

The model families mostly agree the stock is reasonable. Asset-based, earnings-power, and peer-multiple readings all land at or above the price; only the most growth-leaning models suggest the price already leans on continued momentum. Trailing return on equity of about 13 percent sits just above the 12.5 percent level the inversion treats as the durable ceiling for the franchise.

The risk is the one every regional bank carries: credit, deposits, and rate sensitivity. Commercial real estate pricing pressure, a securities book still running off, and funding costs are the variables that decide whether the recent margin and credit strength hold.

Bull Case

Start with the loudest objection, because that is where regional banks get mispriced. The fear is that Zions is a commercial-real-estate-heavy, deposit-fragile regional bank in a higher-for-longer rate world, the same profile that broke peers in 2023. The recent data does not support the panic. First-quarter 2026 net earnings were $232 million, or $1.56 per diluted share, up from $169 million and $1.13 a year earlier, and net interest margin expanded year over year to 3.27 percent as funding costs eased and the asset mix tilted toward loans. The allowance for credit losses stood at 1.16 percent of total loans with nonperforming assets at just 0.48 percent, and classified loans actually declined, reflecting lower commercial real estate risk. The thing investors were told to fear is the thing currently improving.

The balance sheet that scared people in 2023 is being repositioned. The company's 10-K describes the continued paydown of lower-yielding securities, consistent with portfolio runoff that began in 2023, which has improved the overall asset mix and reinvestment yield (FY2025 10-K, accession 0000109380-26-000046). That runoff is exactly the mechanism by which a bank caught with low-coupon securities works its way back to a market-rate book without crystallizing losses through forced sales. The bank also completed the final phase of a multi-year project to replace its core loan and deposit banking systems (same filing), removing a long-running operational overhang and a source of recurring project expense.

Valuation is the cleanest part of the case. At roughly 1.4 times book, against tangible book value per share near $50 and a trailing return on equity around 13 percent, the price-to-tangible-book model lands well above the stock, and the asset-based and peer-multiple families sit at or above today's price too. Against a peer set of similar regionals such as Trustmark, First Financial Bancorp, WaFd, OFG, and First Hawaiian, Zions trades in the upper half on price-to-book, which is consistent with a bank earning an above-average return rather than a sign of overvaluation. The bull case is not that Zions is a growth story; it is that a profitable, recovering regional bank is priced for roughly the returns it is already producing.

Bear Case

The bear case lives in one assumption baked into the price: that a regional bank can hold a return on equity near the top of its historical band indefinitely. At about 1.4 times book the price implies a sustained return on equity beyond the roughly 12.5 percent level that even the strongest regionals have struggled to defend across a full cycle, and history is unkind here, with only a little over half of firms earning this kind of return holding it for a decade. Trailing return on equity around 13 percent clears the bar today, but the assumption is durability, and durability is precisely what a bank cannot guarantee when its inputs are deposits, credit, and rates.

The fragile variable is net interest margin, and the recent trend already shows the strain underneath the year-over-year headline. Margin of 3.27 percent was up sharply from a year ago but slipped four basis points from the prior quarter, pressured by lower earning-asset yields and a decline in average demand deposits, partly offset by cheaper funding. Demand deposits are the free funding that makes a bank's margin; when they drift away the bank must replace them with paid funding, and management has flagged persistent pricing pressure in commercial real estate, the very book that drives spread income. The securities runoff that helps the asset mix is also slow, so the recovery in reinvestment yield is gradual rather than a step change.

Credit is the tail that turns a fair price into a poor one. Zions carries a sizable commercial real estate book and a growing nondepository financial institution portfolio, whose credit quality the company now breaks out separately after a reclassification of certain loans (FY2025 10-K, accession 0000109380-26-000046). Today those exposures show low nonaccrual and charge-off ratios, but the allowance at 1.16 percent of loans is a thin cushion if commercial real estate values reset or the NDFI exposures sour in a downturn. The price embeds the current benign credit picture; a normalization of losses toward mid-cycle levels would compress earnings and the return on equity that the multiple depends on, and a bank trading above book has more room to fall than rise when that happens.

Valuation

Zions is valued the way a bank should be, off the return it earns on its capital rather than an operating multiple. At about $66 (June 28, 2026), roughly 1.4 times book and 1.3 times tangible book against tangible book value per share near $50, the price reads as a bet on sustained profitability. The price-to-tangible-book model, built on a trailing return on equity around 13 percent against a cost of equity in the low-to-mid teens, lands well above the stock, and the excess-return and relative-multiple families also sit at or above today's price. The disagreement comes only from the growth-leaning models, which is appropriate for a mature regional bank that is not a growth story.

The inverted read is the disciplining one. To justify the current multiple the market is implying a return on equity that pushes against the roughly 12.5 percent ceiling the franchise has rarely exceeded for long, an assumption that is within the bank's own recent reach but historically hard to sustain, with only about 57 percent of firms holding such returns for a decade. So the price is not demanding heroics, but it is demanding that the recent earnings strength is the durable run-rate rather than a cyclical high.

The practical conclusion is a stock priced near fair value for a recovering regional bank, with the asset and earnings models supplying a cushion below today's price and the growth models requiring continued execution. The swing factors are net interest margin and credit. Hold the margin and keep credit benign, and the conservative models say there is room above the price; let margin compress or credit normalize, and a multiple above book gives back ground quickly.

Catalysts

The near-term catalysts are the quarterly bank metrics that decide whether the recovery thesis holds. First-quarter 2026 set the bar: diluted EPS of $1.56 versus $1.13 a year earlier, net interest margin of 3.27 percent, an allowance for credit losses at 1.16 percent of total loans, and nonperforming assets down to 0.48 percent. Watch the next prints for margin direction, since margin slipped four basis points sequentially even as it rose year over year, and for any drift in demand deposits, which are the low-cost funding behind that margin.

The two risk catalysts to monitor are commercial real estate and the nondepository financial institution book. Management has called out persistent pricing pressure in commercial real estate lending, so loan growth and spread on that book are worth tracking, alongside the separately disclosed NDFI credit quality metrics. A move in classified loans, charge-offs, or the allowance would shift the credit picture the price currently assumes is benign. Slower-burning, the continued runoff of lower-yielding securities should keep lifting reinvestment yields, a tailwind to margin that plays out over several quarters rather than at once.

Sources: Zions Q1 2026 results, EPS $1.56, NIM 3.27 percent, allowance 1.16 percent, NPAs 0.48 percent (SEC Form 8-K and 10-Q, April 2026; StockTitan, Benzinga, Quartr earnings summaries); Zions FY2025 10-K on securities runoff, core-systems replacement, and NDFI loan disclosure (accession 0000109380-26-000046, filed Feb 24, 2026).

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive ZION report on boothcheck