Balanced Risk-Reward at KeyCorp: Solid Operational Momentum Largely Reflected in Current Valuation, Justifying Hold Rating

Analyst Manan Gosalia from Morgan Stanley maintained a Hold rating on KeyCorp and keeping the price target at $24.00.

Manan Gosalia has given his Hold rating due to a combination of factors that balance improving fundamentals with a valuation that already reflects much of the upside. He notes that KeyCorp delivered a solid earnings beat in 4Q25, primarily on stronger net interest income and better-than-expected fee generation, especially in investment banking. While management’s 2026 revenue and expense outlook appears deliberately cautious, he views this conservatism as creating room for incremental upside if loan growth and fee trends develop as he anticipates.

At the same time, Gosalia’s own forecasts are only modestly above the company’s guidance, with slightly stronger projected loan growth, higher investment banking fees supported by a healthier middle-market M&A backdrop, and somewhat faster expense growth. This translates into only a small upward revision to earnings estimates, suggesting that potential gains from here are limited rather than transformative. In his view, the risk‑reward profile is balanced: operational momentum and a surprising share repurchase outlook support the stock, but these positives are largely offset by a valuation that already prices in improved performance. As a result, he sees neither a compelling reason to aggressively buy nor to sell the shares, justifying a Hold recommendation.

In another report released today, TipRanks – xAI also downgraded the stock to a Hold with a $23.00 price target.