While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Zions Bancorporation (ZION 0.33%) climbed about 2% on Friday after Goldman Sachs upgraded the regional bank from sell to neutral.
So what: Along with the upgrade, analyst Ryan Nash raised his price target to $33 (from $29), representing about 9% worth of upside to yesterday's close. While Nash isn't exactly thrilled with Zions' appreciation prospects, he believes the downside is becoming more limited given the bank's steadily improving fundamentals.
Now what: Goldman offered a few reasons Zions' risk/reward trade-off is getting better. "1) [I]ts story is becoming cleaner (CDO sales, TRS termination, capital clarity), 2) its outlook for loan growth is improving and 3) leverage to higher rates should support shares; we had previously been less optimistic on these themes," noted Nash.
When you couple those improving prospects with the stock's industry-lagging price-to-book ratio, Zions might be worth buying at this point.