KeyCorp Stock Outlook: Is Wall Street Bullish or…

KeyCorp Stock Outlook: Is Wall Street Bullish or Bearish?

KeyCorp (KEY), headquartered in Cleveland, Ohio, operates as the holding company for KeyBank National Association. Valued at $19 billion by market cap, the company provides retail and commercial banking, commercial leasing, investment management, consumer finance, and investment banking products and services to individual, corporate, and institutional clients.

Shares of this leading regional bank have outperformed the broader market considerably over the past year. KEY has gained 75.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.7%. In 2024, KEY stock is up 32.3%, surpassing the SPX’s 25.5% rise on a YTD basis.

Zooming in further, KEY’s outperformance is also apparent compared to the iShares U.S. Regional Banks ETF (IAT). The exchange-traded fund has gained about 64.1% over the past year. Moreover, KEY’s returns on a YTD basis outshine the ETF’s 30.9% gains over the same time frame.

KEY's strong performance was driven by increased adjusted non-interest income, higher NII, and decreased expenses. Improved deposit balance also played a part in the positive performance. Higher trust and investment services income, commercial mortgage servicing fees, and investment banking and debt placement fees were the main contributors to the rise in income.

On Oct. 17, KEY shares closed down more than 2% after reporting its Q3 results. Its revenue declined 55.6% year over year to $695 million. The company’s adjusted EPS of $0.30 beat the consensus estimates of $0.27, reflecting a 3.4% rise from the prior-year quarter.

For the current fiscal year, ending in December, analysts expect KEY’s EPS to decline 12.9% to $1.08 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.

Among the 18 analysts covering KEY stock, the consensus is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, two “Moderate Buys,” and nine “Holds.”

This configuration is less bullish than a month ago, with nine analysts suggesting a “Strong Buy.”

On Nov. 7, Citigroup Inc. (C) analyst Keith Horowitz downgraded KEY to “Neutral” with a $19 price target.

While KEY currently trades above its mean price target of $18.79, the Street-high price target of $20 suggests an upside potential of 5%.

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On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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