Zions Bancorp ZION stock is down 3.5% as other bank stocks moved into positive territory on Tuesday, after the regional bank cut its net interest income outlook to decreasing from moderately decreasing. Analysts at Truist said net interest margin (NIM) for Zions is now trending towards 2.85%, below the 3.07% consensus estimate by analysts. “We expect shares to underperform today,” Truist analysts said. “We would be buyers on weakness.” Analysts said they have seen other examples of net interest margins falling under pressure in the banking sector. “We think 2Q23 EPS results are likely to show material NIM pressure as deposit/funding challenges are ongoing for the sector,” Truist said. “Moreover, it is unlikely that consensus estimates have bottomed given the interest rate outlook for the remainder of the year.” Meanwhile, the KBW Nasdaq Bank Index BKX is up 1.6%, the SPDR S&P Regional Banking ETF KRE is up 1.5% and the Financial Select SPDR ETF XLF is gaining 0.9%.
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