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4 big analyst picks: Battered regional banks becoming buys

Investing.com -- Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: an Outperform initiation at Zions Bancorp and upgrades at KeyCorp, Greenhill, and Myriad Genetics.

InvestingPro subscribers got this news before anyone else. Start your 7-day trial to get on board.

Zions Bancorp initiated at Outperform, valuation is deeply discounted

Hovde Group initiated coverage on regional bank Zions Bancorp (NASDAQ: ZION) with an Outperform rating and a price target of $40.00, as InvestingPro reported in real time.

According to the firm, Zion’s operational playbook and historically lower-than-peer deposit beta position the company well for the volatile economic landscape, underscored by the improved credit history and consistent growth through a wide range of economic periods.

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Despite its conservative estimates accounting for modest near-term deposit runoff, slower growth, and higher LLP (loan loss provisions), the firm confidently recommends the stock due to its significantly discounted share price.

KeyCorp upgraded to Buy, shares surge

Odeon Capital upgraded another regional bank, KeyCorp (NYSE:KEY), to Buy from Hold with a price target of $11.00. Shares closed more than 4% higher yesterday.

While still expecting that KeyCorp’s fundamentals will be weak this year and that a recovery in earnings will not occur until 2024, the firm believes that investors buying this stock at current prices are likely to be well rewarded, highlighting the dividend yield of 8.35%, and the stock valued at 77.7% of book value. Furthermore, the firm noted that unlike many of its peers, this bank did not shift its available-for-sale portfolio (AFS) to held to maturity (HTM), so its book value is credible. Moreover, 66% of its deposits are insured or collateralized.

2 more upgrades

Keefe, Bruyette & Woods upgraded Greenhill (NYSE:GHL) to Market Perform from Underperform after Mizuho Financial, the 15th largest bank in the world as measured by total assets of ~$2 trillion, announced it will acquire the company in an all-cash transaction at $15 per share, reflecting an enterprise value of around $550 million, including assumed debt.

Greenhill shares jumped more than 116% yesterday.

Myriad Genetics (NASDAQ:MYGN) shares gained more than 3% pre-market today after Goldman Sachs upgraded the company to Buy from Sell and raised its price target to $25.00 from $18.00.

Given the persistent multiple discount vs peers, the firm believes Myriad’s resetting its organic growth rate, restructuring and improving its commercial efforts and trimming the portfolio is not reflected in the share price.

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