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Keycorp (KEY)
NYSE:KEY
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KeyCorp
(NYSE:KEY)54Neutral
Positive Factors
Commercial Loan Growth
Leading indicators for commercial loan growth seem positive as pipelines are strong, businesses are more optimistic, and 80% of surveyed middle market clients are confident in their growth prospects.
Earnings Performance
4Q24 Operating EPS of $0.38 beat consensus estimates driven by lower provision and higher revenues.
Negative Factors
Loan Growth Guidance
2025 loan growth guidance was weaker, with new guidance for average loans to be down 2-5% year over year.
KeyCorp (KEY) vs. S&P 500 (SPY)
Market Cap
$17.60B
Dividend Yield5.15%
Average Volume (3M)12.32M
Price to Earnings (P/E)1663.6
Beta (1Y)1.71
Revenue Growth-11.11%
EPS Growth-133.79%
CountryUS
Employees17,333
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)-0.30
Shares Outstanding1,105,119,300
10 Day Avg. Volume13,777,918
30 Day Avg. Volume12,321,792
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.15
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
$20.39Price Target Upside29.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
KeyCorp Business Overview & Revenue Model
Company DescriptionKeyCorp (NYSE: KEY) is a financial services company headquartered in Cleveland, Ohio. It operates as the holding company for KeyBank National Association, providing a range of retail and commercial banking services to individual, corporate, and institutional clients. The company offers products and services such as deposit, lending, cash management, and investment management solutions. KeyCorp serves clients across multiple sectors, including consumer, energy, healthcare, industrial, public sector, and real estate.
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
Negative
15.73
Price Trends
17.15
Negative
17.52
Negative
16.22
Negative
Market Momentum
-0.36
Positive
31.58
Neutral
22.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KEY, the sentiment is Negative. The current price of 15.73 is below the 20-day moving average (MA) of 16.93, below the 50-day MA of 17.15, and below the 200-day MA of 16.22, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 31.58 is Neutral, neither overbought nor oversold. The STOCH value of 22.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KEY.
KeyCorp Risk Analysis
KeyCorp disclosed 45 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $22.00B | 12.40 | 9.93% | 4.10% | 10.13% | -1.25% | |
72 Outperform | $27.02B | 12.90 | 11.92% | 3.61% | 11.21% | -2.26% | |
71 Outperform | $70.83B | 13.03 | 11.10% | 3.55% | 7.24% | 7.51% | |
71 Outperform | $20.00B | 11.43 | 10.72% | 4.46% | 2.70% | -8.16% | |
69 Neutral | $7.58B | 10.36 | 13.15% | 3.28% | 7.91% | 13.79% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
54 Neutral | $17.60B | 1,663.64 | -0.99% | 5.15% | -11.11% | -133.79% |
* Financial Sector Average
Performance Comparison
KEY
KeyCorp
15.73
1.53
10.77%
FITB
Fifth Third Bancorp
40.06
4.67
13.20%
HBAN
Huntington Bancshares
15.14
2.26
17.55%
PNC
PNC Financial
179.77
32.37
21.96%
RF
Regions Financial
22.07
3.33
17.77%
ZION
Zions Bancorporation National Association
50.15
9.90
24.60%
KeyCorp Earnings Call Summary
Earnings Call Date: Jan 21, 2025 | % Change Since: -13.00% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While the company reported an EPS loss and faced challenges with elevated expenses and declining loans, there were significant achievements in revenue growth, client deposit growth, investment banking success, and technological advancements. The strong credit performance and capital position further indicate a positive outlook.Highlights
Positive Adjusted EPS
Despite reporting an EPS loss of $0.28 per share, after adjusting for strategic securities repositioning, EPS was a positive $0.38.
Revenue Growth
Revenue was up 11% sequentially and 16% year-over-year after adjusting for securities repositioning.
Client Deposit Growth
Client deposits grew 1.5% sequentially and 4% year-over-year.
Strong Credit Performance
Credit migration improved for the fourth consecutive quarter with criticized loans down by $500 million and net charge-offs down $40 million sequentially.
Record Assets Under Management
Assets under management reached a record of $61.4 billion.
Investment Banking Success
Fourth quarter investment banking fees were $221 million, marking the second strongest year in history.
Technological Advancements
Significant progress made in core modernization projects and cloud migration, with plans to increase tech spend by 10% in 2025.
Strong Capital Position
CET1 ratio reached 12% and marked CET1 was 9.8%, both in the top quartile of peer group.
Lowlights
EPS Loss
Reported EPS loss of $0.28 per share due to strategic securities repositioning.
Elevated Expenses
Incurred approximately $50 million of elevated expenses in the fourth quarter.
Loan Decline
Average loans declined 1.4% sequentially, reflecting tepid client demand and intentional runoff of low-yielding consumer loans.
Net Charge-Offs
Net charge-offs were $114 million, representing 43 basis points of average loans.
Company Guidance
During the Q4 2024 earnings call, KeyCorp provided substantial guidance, reflecting a positive outlook for 2025. Adjusted earnings per share (EPS) were reported at $0.38, with expectations to drive a 20% increase in net interest income (NII) for 2025, buoyed by securities repositioning and strategic investments. Fourth quarter net interest margin (NIM) reached 2.7%, with projections to approach 2.8% by year-end 2025. Commercial loan growth is anticipated at 2-4%, counterbalancing a planned $3 billion reduction in consumer loans. The company also forecasts a 5% rise in noninterest income, with promising investment banking results—fourth quarter fees were $221 million, contributing to a record $54 billion in capital raised. Additionally, KeyCorp plans a 3-5% increase in expenses, emphasizing disciplined management while enhancing technological capabilities and workforce expansion in wealth and investment banking sectors. Credit quality remains robust, with net charge-offs expected to stabilize at 40-45 basis points. The bank's CET1 ratio stands at a strong 12%, positioning it well for future growth and investments.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.