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Keycorp (KEY)
NYSE:KEY
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KeyCorp
(NYSE:KEY)
54Neutral
Positive Factors
Earnings
4Q24 Operating EPS of $0.38 beat consensus estimates driven by lower provision and higher revenues.
Stock Buyback
Management noted plans to approach the board on reinstating a buyback authorization, which could further support the stock.
Valuation
The stock ranks among the best value on the implied cost of equity valuation screen.
Negative Factors
Credit Concerns
Credit concerns are mounting amidst recently elevated concerns for a weakening macro backdrop.
Loan Growth
2025 loan growth guidance was weaker with average loans expected to be down 2-5% year over year.
Net Interest Income
2025 NII guidance was relatively in-line with expectations, but weaker than investors were looking for.
KeyCorp (KEY) vs. S&P 500 (SPY)
Market Cap
$15.41B
Dividend Yield5.57%
Average Volume (3M)18.35M
Price to Earnings (P/E)1663.6
Beta (1Y)1.56
Revenue Growth-12.30%
EPS Growth-120.41%
CountryUS
Employees16,989
SectorFinancial
Sector Strength83
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.38
Shares Outstanding1,095,717,200
10 Day Avg. Volume21,879,494
30 Day Avg. Volume18,346,824
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.21
Price to Cash Flow (P/CF)2.60
P/FCF Ratio1.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.77Price Target Upside20.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
KeyCorp Business Overview & Revenue Model
Company DescriptionKeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States. It operates in two segments, Consumer Bank and Commercial Bank. The company offers various deposits, investment products and services; and personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, investment, cash management, portfolio management, and trust and related services to individuals and small and medium-sized businesses. It also provides a suite of banking and capital market products, such as syndicated finance, debt and equity capital market products, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory, and public finance, as well as commercial mortgage loans comprising consumer, energy, healthcare, industrial, public sector, real estate, and technology loans for middle market clients. In addition, the company offers community development financing, securities underwriting, brokerage, and investment banking services. As of December 31, 2021, it operated through a network of approximately 999 branches and 1,317 ATMs in 15 states, as well as additional offices, online and mobile banking capabilities, and a telephone banking call center. KeyCorp was founded in 1849 and is headquartered in Cleveland, Ohio.
How the Company Makes MoneyKeyCorp makes money primarily through its banking operations, which include interest income from loans and investment securities, as well as non-interest income from fees and service charges. The company's key revenue streams are derived from its Consumer Bank and Commercial Bank segments. The Consumer Bank generates income through personal banking products like mortgages, personal loans, credit cards, and deposit accounts. The Commercial Bank earns revenue from services such as commercial loans, treasury and cash management services, and equipment leasing. Additionally, KeyCorp benefits from investment management and insurance services. Significant partnerships and cross-selling opportunities within its diversified financial services portfolio also contribute to its earnings, enhancing the company's ability to serve a wide range of customer needs.
KeyCorp Financial Statement Overview
Summary
KeyCorp faces a mixed financial landscape with declining net income and operational efficiency issues impacting the income statement. The balance sheet reflects high leverage, posing potential risks, though equity is growing. Cash flow statements emphasize liquidity pressures despite positive operating cash flows, necessitating strategic improvements in cash management and operational efficiency.Income Statement
KeyCorp has shown fluctuating revenue with a decline from $7.03B in 2022 to $5.89B in 2023, followed by an increase to $8.43B in 2024. The gross profit margin remains high, but a significant net loss in 2024 indicates profitability challenges. The negative trend in EBIT margin from 2022 to 2024 further underscores operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet shows a stable equity base with stockholders’ equity increasing to $18.18B in 2024. However, the debt-to-equity ratio remains high, indicating potential leverage risks. The equity ratio is modest, suggesting a balanced asset structure but highlighting a need for improved capital management.55
Neutral
Cash Flow
Cash flow analysis reveals volatility, with operating cash flow dropping significantly in 2024 compared to 2023. Free cash flow remains positive but lower than previous years, indicating pressures on liquidity. Despite these challenges, the company maintains a positive operating cash flow to net income ratio.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.39B | 5.89B | 7.03B | 7.04B | 6.49B | Gross Profit |
| 8.43B | 10.40B | 7.03B | 7.04B | 6.49B | EBIT |
| 76.00M | 2.23B | 3.22B | 3.27B | 1.57B | EBITDA |
| 0.00 | 1.25B | 2.47B | 3.29B | 1.67B | Net Income Common Stockholders |
| -320.00K | 967.00M | 1.92B | 2.63B | 1.34B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 19.25B | 941.00M | 4.55B | 57.29B | 44.84B | Total Assets |
| 187.17B | 188.28B | 189.81B | 186.35B | 170.34B | Total Debt |
| 14.23B | 22.61B | 30.08B | 12.63B | 14.47B | Net Debt |
| 12.49B | 21.67B | 29.19B | 11.72B | 13.38B | Total Liabilities |
| 168.99B | 173.64B | 176.36B | 168.92B | 152.35B | Stockholders Equity |
| 18.18B | 14.64B | 13.45B | 17.42B | 17.98B |
| Cash Flow | Free Cash Flow | |||
| 664.00M | 2.76B | 4.36B | 1.09B | 1.61B | Operating Cash Flow |
| 664.00M | 2.90B | 4.47B | 1.15B | 1.67B | Investing Cash Flow |
| 2.50B | 1.42B | -10.93B | -15.07B | -24.72B | Financing Cash Flow |
| -2.36B | -4.27B | 6.44B | 13.74B | 23.41B |
KeyCorp Technical Analysis
Neutral
14.72
Price Trends
15.60
Negative
16.57
Negative
16.48
Negative
Market Momentum
-0.34
Negative
49.15
Neutral
75.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KEY, the sentiment is Neutral. The current price of 14.72 is above the 20-day moving average (MA) of 14.44, below the 50-day MA of 15.60, and below the 200-day MA of 16.48, indicating a neutral trend. The MACD of -0.34 indicates Negative momentum. The RSI at 49.15 is Neutral, neither overbought nor oversold. The STOCH value of 75.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KEY.
KeyCorp Risk Analysis
KeyCorp disclosed 38 risk factors in its most recent earnings report. KeyCorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
KeyCorp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $23.57B | 11.37 | 11.71% | 4.14% | 6.12% | 0.68% | |
73 Outperform | $21.03B | 11.19 | 10.30% | 4.30% | 7.89% | 17.47% | |
72 Outperform | $18.36B | 9.92 | 11.33% | 4.82% | 1.23% | 12.14% | |
64 Neutral | $15.56B | 11.76 | 6.37% | 4.53% | -2.52% | 13.92% | |
63 Neutral | $12.32B | 9.52 | 7.89% | 79.24% | 12.74% | -4.55% | |
63 Neutral | $25.95B | 10.79 | 9.39% | 3.23% | 1.41% | 1.12% | |
54 Neutral | $15.41B | 1,663.64 | 0.14% | 5.57% | -12.30% | -120.41% |
* Financial Sector Average
Performance Comparison
KEY
KeyCorp
14.72
0.70
4.99%
FITB
Fifth Third Bancorp
35.28
-0.38
-1.07%
HBAN
Huntington Bancshares
14.40
1.40
10.77%
MTB
M&T Bank
167.39
26.18
18.54%
RF
Regions Financial
20.28
1.44
7.64%
CFG
Citizens Financial
37.06
3.47
10.33%
KeyCorp Earnings Call Summary
Earnings Call Date: Apr 17, 2025 | % Change Since: 4.62% | Next Earnings Date: Jul 22, 2025
Earnings Call Sentiment Positive
KeyCorp reported strong first-quarter results with significant revenue and net interest income growth, a robust capital position, and record investment banking fees. However, market uncertainty and potential economic weakness pose challenges, as evidenced by reserve adjustments and elevated commercial real estate charge-offs.Highlights
Significant Revenue Growth
Revenues were up 16% year-over-year, exceeding expectations, with a strong pre-provision net revenue increase of over $90 million from the previous quarter.
Strong Capital Position
KeyCorp ended the quarter with a CET1 ratio of 11.8% and a marked CET1 ratio of approximately 10%, both at the high end of their peer group, indicating a robust capital position.
Record Investment Banking Fees
For the second consecutive year, first-quarter investment banking fees were a record, with syndication and debt capital markets activity driving the growth.
Net Interest Income Growth
Tax-equivalent net interest income was $1.1 billion, up 4% sequentially and 25% year-over-year, driven by strategic actions taken in the previous year.
Improved Asset Quality
Nonperforming assets declined by nearly 10% sequentially, and overall credit migration improved for a fifth consecutive quarter.
Lowlights
Market Uncertainty Impacting Client Sentiment
Recent geopolitical events and economic uncertainty have caused clients to pause transactional activity, affecting market conditions.
Potential Economic Weakness
A reserve adjustment in excess of $100 million was made to account for potential economic weakness that could develop later in the year.
Elevated Commercial Real Estate Charge-Offs
Commercial real estate gross charge-offs were elevated due to a couple of specific names, despite overall portfolio health improving.
Company Guidance
During KeyCorp's First Quarter 2025 Earnings Conference Call, the company provided guidance emphasizing its strong financial position despite macroeconomic uncertainties. KeyCorp reported a 16% year-over-year increase in revenue while maintaining stable expenses, resulting in a significant $90 million increase in pre-provision net revenue compared to the fourth quarter. The company highlighted a decline in non-performing assets (NPAs) by nearly 10% sequentially and a provision for credit losses of $118 million, which included $110 million in net charge-offs and an $8 million reserve build. KeyCorp's CET1 ratio stood at 11.8%, with liquidity comprising over 30% in cash and cash equivalents. The bank maintained its 2025 guidance, anticipating 20% net interest income growth, supported by strong loan and deposit performance and strategic actions taken in 2024. Additionally, KeyCorp announced a $1 billion share repurchase authorization, expected to commence in the second half of the year, contingent on market conditions and economic clarity.KeyCorp Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
KeyCorp Strengthens Board and Repositions Portfolio
Positive
Dec 31, 2024
KeyCorp has announced the appointment of Jacqueline Allard and Somesh Khanna to its Board of Directors, effective immediately, as part of their investment agreement with Scotiabank. These appointments align with Scotiabank’s director designation rights following their strategic minority investment in KeyCorp, where they acquired approximately 14.9% of KeyCorp’s common stock with a $2.0 billion investment. In conjunction with this strategic move, KeyCorp has also completed a strategic repositioning of its available-for-sale investment securities portfolio, resulting in a $700 million after-tax loss in Q4 2024. The repositioning involved selling $3 billion in low-yielding securities and reinvesting in higher-yielding options, enhancing the company’s financial positioning moving forward. This strategic partnership and financial restructuring are anticipated to strengthen KeyCorp’s market position and long-term shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.