KeyCorp, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Keith Horowitz from Citi maintained a Hold rating on the stock and has a $20.00 price target.
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Keith Horowitz has given his Hold rating due to a combination of factors that suggest a balanced outlook for KeyCorp. The company’s net interest income (NII) growth remains robust, with expectations that deposit betas will stay favorable as the Federal Reserve continues to cut rates. This aligns with the projected net interest margin (NIM) for the third quarter and the year’s end, which are in line with management’s guidance.
However, despite the strong NII story, the stock’s current valuation appears to reflect a relatively full price, trading at 1.5 times price-to-tangible book value (P/TBV). This valuation seems to account for the potential outperformance in NII, as the market is already modeling a 22% growth, which limits the upside potential. Additionally, while there is room for upward revisions in estimates due to higher deposit balances and investment banking fees, the expected share price return of 4.8% suggests limited near-term appreciation, justifying the Hold rating.
In another report released on September 12, Truist Financial also maintained a Hold rating on the stock with a $20.00 price target.