Cecily sells ZION 27.54: A key factor pulling in potential investors is in regard to excess capital return.

Analysts believe the most rate sensitive stocks, although trading at high multiples, are generating relatively lower earnings than the stocks trading at lower multiples. Additionally, the firm is of the view that the possibility of the Fed installing a rate hike has not changed much. The stocks are trading down as much as 16% from the recent high levels they stood at, primarily because the rate trade has disappeared for now. Bernstein specified that of the four upgrades, ZION and CFG are thought to be the most sensitive and likely to react the most to a rise in interest rates. To give an insight into the appeal of each stock, ZFG and ZION are attractive based on the price to tangible book value ratio, whereas KEY and FITM are an ideal investment opportunity based on their price to earnings ratio.


Dacia:
Analysts at Bernstein have informed investors that the recent dents in regional banks have inflicted considerable pressure and channeled stocks toward tangible book values.

Lindsey:
The opportunity for excess capital distribution holds particularly true for banks that are likely to drop out of the CCAR process.

Pasty:
The firm also states that there is substantial opportunity for excess capital distribution, posing an ideal investment opportunity for potential investors.

Luann:
The mid-cap bank stocks trade at reasonable multiples of tangible book values, in relation to forward return expectations.

Roselle:
Bernstein backs the upgrades with views that project considerable upsides for the banks.

Felicia:
In other words, I believe this is a turnaround story that should pave the way for a higher valuation and shareholder returns over the next few years.

Sang:
All of these efforts, if executed to plan, will lower costs, increase profits, and reduce risk on the bank's balance sheet.

Shella:
Longer term, the bank's management has recognized the problem with high costs, and has implemented a multi-year cost cutting initiative.

Charlie:
If we add this one-time charge back to second-quarter earnings, Zions would have reported approximately $135.9 million in profits, a 30% increase from the 2014 second quarter.

Billi:
In other words, this short-term $137 million loss is actually a positive development, dramatically lowering the risk on the bank's books.

Zions Bancorporation (NASDAQ:ZION)
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