DA Davidson cuts KeyCorp price target to $21, maintains Buy

Despite these positive indicators, KeyCorp (NYSE:KEY) did not raise its NII guidance as some investors had anticipated. This expectation was partly due to the earlier-than-expected closure of the Scotia investment and a more favorable interest rate forecast. Yet, the company faced greater challenges with loan pressure than anticipated in the fourth quarter.The firm's credit quality remains robust, and the outlook for 2025 is very optimistic. While currently showing negative earnings, InvestingPro analysts expect the company to return to profitability this year with projected EPS of $1.49. DA Davidson has revised its 2026 earnings per share (EPS) estimate down by $0.05 to $1.73, leading to the lowered price target.Winter's commentary highlighted the mixed financial landscape for KeyCorp, balancing strong credit quality and fee income growth against the headwinds faced in the lending sector. Despite these challenges, DA Davidson's stance continues to be bullish on the company's stock, as reflected in the maintained Buy rating. For deeper insights into KeyCorp's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

Despite these positive indicators, KeyCorp did not raise its NII guidance as some investors had anticipated. This expectation was partly due to the earlier-than-expected closure of the Scotia investment and a more favorable interest rate forecast. Yet, the company faced greater challenges with loan pressure than anticipated in the fourth quarter.The firm's credit quality remains robust, and the outlook for 2025 is very optimistic. While currently showing negative earnings, InvestingPro analysts expect the company to return to profitability this year with projected EPS of $1.49. DA Davidson has revised its 2026 earnings per share (EPS) estimate down by $0.05 to $1.73, leading to the lowered price target.Winter's commentary highlighted the mixed financial landscape for KeyCorp, balancing strong credit quality and fee income growth against the headwinds faced in the lending sector. Despite these challenges, DA Davidson's stance continues to be bullish on the company's stock, as reflected in the maintained Buy rating. For deeper insights into KeyCorp's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

Despite these positive indicators, KeyCorp did not raise its NII guidance as some investors had anticipated. This expectation was partly due to the earlier-than-expected closure of the Scotia investment and a more favorable interest rate forecast. Yet, the company faced greater challenges with loan pressure than anticipated in the fourth quarter.

The firm's credit quality remains robust, and the outlook for 2025 is very optimistic. However, DA Davidson has revised its 2026 earnings per share (EPS) estimate down by $0.05 to $1.73, leading to the lowered price target.

Winter's commentary highlighted the mixed financial landscape for KeyCorp, balancing strong credit quality and fee income growth against the headwinds faced in the lending sector. Despite these challenges, DA Davidson's stance continues to be bullish on the company's stock, as reflected in the maintained Buy rating.

In other recent news, KeyCorp's financial performance has seen mixed outcomes. The company's fourth-quarter earnings surpassed expectations, with an adjusted earnings per share of $0.38, beating the analyst consensus of $0.33. However, the revenue of $865 million fell short of Wall Street's forecast of $1.74 billion. The financial services company also reported a 10% quarter-over-quarter increase in net interest income, reaching $1.06 billion, and a 27% year-over-year increase in fees from its investment banking, payments, and wealth management businesses.

Despite these positive trends, KeyCorp recorded a net loss from continuing operations attributable to common shareholders of $279 million, or $0.28 per diluted share. This included $657 million, or $0.66 per share, of after-tax charges related to the loss on sale of securities. However, the company saw a decrease in net loan charge-offs by 26% quarter-over-quarter and a 7% decline in criticized loans, indicating an improvement in credit quality.

Keefe, Bruyette & Woods analyst David Konrad recently adjusted the price target for KeyCorp shares to $21 from $22, while maintaining an Outperform rating on the stock. This followed KeyCorp's announcement of its financial guidance, which included a balance sheet restructuring in the last quarter of 2024 and a subsequent earnings report. Konrad's revised estimates for KeyCorp include a 20% growth in net interest income, a 7% increase in fees, and a 4% rise in expenses. He also projected a $2.00 exit rate for earnings power in the second half of 2026.

These recent developments reveal KeyCorp's strategic plans and financial performance, with CEO Chris Gorman expressing confidence in the company's positioning for 2025.

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