KeyCorp price target raised to $20 from $18 at BofA on growth outlook

BofA Securities raised its price target on KeyCorp (NYSE:KEY) to $20 from $18 on Monday, while maintaining a Buy rating on the $17.15 billion super-regional bank. The firm cited KeyCorp’s positioning to benefit from an expected pickup in U.S. domestic capital expenditure. According to InvestingPro analysis, KeyCorp currently appears slightly undervalued based on its proprietary Fair Value model.

The bank stock currently trades at 9.1 times 2026 price-to-earnings and 1.2 times year-end 2025 tangible book value, compared to peer medians of 9.4 times and 1.6 times respectively, according to BofA. The firm believes this valuation offers "among the most compelling risk/reward in the super-regional bank space." While InvestingPro data indicates a WEAK overall Financial Health score, analysts expect the company to return to profitability this year. Get the full analysis and 12+ additional InvestingPro Tips with a subscription.

BofA highlighted KeyCorp’s targeted commercial and industrial lending across seven industry verticals, complemented by its middle markets investment banking business. The bank’s excess capital position should allow it to capitalize on rebounding U.S. growth, the firm noted.

The new price target reflects higher assigned multiples, with BofA now using 13.5 times and 12.5 times fiscal year 2025/2026 price-to-earnings ratios, up from 12.0 times and 11.0 times previously. The firm also raised price-to-tangible book value multiples to 1.4 times and 1.3 times from 1.3 times for both years.

The updated price objective implies 28% upside potential for KeyCorp stock, in addition to what BofA described as "an attractive 5% dividend yield." The firm reiterated its Buy rating on the shares. InvestingPro data confirms the impressive 5.24% dividend yield, noting that KeyCorp has maintained dividend payments for 54 consecutive years, demonstrating remarkable shareholder commitment despite market cycles.

In other recent news, KeyCorp has announced its second-quarter dividends for 2025, with a cash dividend of $0.205 per common share payable on June 13, 2025, and various dividends on preferred shares payable on June 16, 2025. In a strategic move, KeyBank, a subsidiary of KeyCorp, has expanded its partnership with Qolo by making a minority equity investment to enhance its banking innovation, particularly through KeyVAM®, a cash management solution. KeyCorp’s recent shareholder meeting resulted in the election of all fifteen director nominees and the ratification of Ernst & Young LLP as independent auditors for fiscal year 2025. Analysts from Keefe, Bruyette & Woods have maintained an Outperform rating for KeyCorp, with a price target of $18.00, citing strong investment banking performance and loan growth. Meanwhile, Jefferies has initiated coverage with a Hold rating, also setting an $18.00 price target, highlighting KeyCorp’s diversified revenue streams but expressing caution due to economic uncertainties. CEO Chris Gorman shared insights on the company’s financial outlook, projecting a 10% year-over-year increase in investment banking revenue for the first half of 2025. KeyCorp is also experiencing signs of loan growth with increased utilization rates in its commercial and industrial sector. These developments reflect KeyCorp’s ongoing efforts to strengthen its financial position and enhance shareholder value.

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