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On Wednesday, Truist Securities maintained a Hold rating on KeyCorp stock (NYSE:KEY), with a consistent price target of $19.00. The firm's analysis followed KeyCorp's recent financial update, which indicated a modest downturn in net interest income expectations, sparking discussions among investors about the bank's potential for balance sheet expansion. According to InvestingPro data, KeyCorp, with a market capitalization of $19.22 billion, has seen a significant revenue decline of 28.08% over the last twelve months, though analysts expect both sales and net income growth this year. Despite the initial reaction, which saw KeyCorp shares dip by 4%, Truist Securities noted a possible upside in the coming years, with the net interest margin (NIM) potentially surpassing 3% at some stage in 2026.
Brian Foran of Truist Securities highlighted KeyCorp's valuation, suggesting that a forward price-to-earnings (P/E) multiple of 10.5 times is reasonable. This assessment is based on the bank's historical average next twelve months (NTM) P/E ratio of 10.7 times. Notable for income investors, InvestingPro reveals that KeyCorp offers a substantial 4.65% dividend yield and has maintained dividend payments for an impressive 54 consecutive years. Get access to more valuable insights and 6 additional ProTips with an InvestingPro subscription. The analysis by Truist Securities outlined several factors that could impact the stock's performance, both negatively and positively.
The downside risks to KeyCorp's stock, as identified by Truist Securities, include a slower recovery in net interest margin due to the yield curve or balance sheet structure, deceleration in loan and fee income growth, and potential deteriorations in credit quality and increased expenses. While the company wasn't profitable over the last twelve months, InvestingPro analysis indicates analysts expect profitability to return this year. Discover comprehensive insights in the Pro Research Report, available for KeyCorp and 1,400+ other US stocks. Conversely, the firm also pointed out possible positive influences on the stock's target price, such as beneficial shifts in the yield curve, a robust environment for fee growth, and better-than-anticipated outcomes in credit and expense management.
Truist Securities' stance on KeyCorp remains cautious, with the Hold rating reflecting uncertainty about the bank's short-term growth prospects. The $19.00 price target stands as a marker for investors to gauge the bank's performance against market expectations, while considering the outlined risks and opportunities that may sway the stock's future trajectory.
In other recent news, KeyCorp has been a focus of recent analyst adjustments. DA Davidson has cut its price target for KeyCorp to $21 while maintaining a Buy rating. Similarly, Keefe, Bruyette & Woods analyst David Konrad has adjusted the price target for KeyCorp shares to $21 from $22, maintaining an Outperform rating. These revisions follow KeyCorp's recent financial guidance and earnings report.
KeyCorp's fourth-quarter results were mixed, with earnings exceeding expectations but revenue falling short. The company reported an adjusted earnings per share of $0.38, surpassing the analyst consensus of $0.33. However, the revenue came in at $865 million, missing Wall Street's forecast of $1.74 billion.
Despite reporting a net loss from continuing operations attributable to common shareholders of $279 million, 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. These recent developments provide a snapshot into KeyCorp's current financial standing.
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