Morgan Stanley analyst Ken Zerbe upgraded the Midcap Bank sector to In-Line from Cautious citing the group's underperformance year-to-date and better earnings from lower deposit betas. The firm's top picks are SVB Financial (SIVB), Signature Bank (SBNY), KeyBanc (KEY), and Citizens Financial (CFG). Note the analyst upgraded People's United (PBCT) and Prosperity Bancshares (PB) to Equal Weight citing valuations.

UBS lowered the firm's price target on Zions Bancorp to $45 from $47 and keeps a Neutral rating on the shares. While "impressed" by Zions' ability to control deposit costs in a competitive backdrop, the firm thinks the liability sensitive positioning potentially puts the bank in "a precarious spot" in a higher-for-longer rate scenario and coming out of Q1 earnings the firm says it gets the sense that the net interest income trajectory from here is "well understood by the Street."

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Truist lowered the firm's price target on Comerica to $60 from $62 and keeps a Buy rating on the shares as part of a broader research note recapping Q1 earnings among Community and Regional Banks. The firm's updated model for Fed funds rate forecast calls for zero cuts in 2024 and four 25bps cuts in 2025 from three in 2023 and 2024 previously, the analyst tells investors in a research note. Truist is also cutting its FY24 and FY25 EPS on the bank to $5.07 and $6.40 from $5.16 and $6.34, with estimate revisions primarily driven by higher net interest margins and offset partially by lower fee income and higher operating expenses in 2024.