Zions Bancorp NA 3Q26: NII & NIM Outlook Encouraging but Our Forecast Falls Short with Sizeable Lift Needed from Loans; UW

3Q26 core EPS of $1.75 came in above our $1.60 forecast and consensus of $1.67, driven by PTPP income ~$20mm above our estimate on higher NII and lower expenses, with provision expense $10mm below forecast. Management guides 3Q27 vs 3Q26 to NII +8-12%, customer-related fee income +6-9%, adjusted expense +4-6% and period-end loans +2-4%. We are skeptical of the 8-12% NII outlook given intense deposit cost competition and limited loan growth (period-end loans flat in 3Q, only 2-4% expected through 3Q27), and we struggle to see NIM reaching the mid-3.50s in 2027 (we forecast ~3.40% in 4Q27). We raise our 2026-2028 core EPS estimates to $6.65, $6.85 and $7.30. Shares trade at ~1.3x 2027e TBV, a 5% premium to our coverage, with an implied cost of equity of ~11.5%. Maintain Underweight, Dec-27 price target $70 (prior $65).