KeyCorp Faces Challenges Despite Positive Indicators
The Cleveland-based banking giant KeyCorp (KEY), which oversees KeyBank, is currently witnessing significant fluctuations in its stock performance. With a market capitalization of $17.2 billion, it stands as one of the largest regional banking entities in the United States.
KeyCorp’s Size and Position in the Market
As a large-cap stock, KeyCorp represents a substantial presence in the financial sector. It delivers a range of services, including investment management, banking, consumer finance, and investment banking to both individuals and corporations.
Stock Performance Shows Mixed Results
Recently, KeyCorp’s stock has dropped 13.3% from its 52-week high of $20.04, reached on November 25. Although the stock gained 4.5% over the last three months, it fell short of the Financial Select Sector SPDR Fund’s (XLF) impressive 8.7% increase during the same period.
Long-Term Trends and Comparisons
Over a longer timeline, KeyCorp has also struggled to keep pace with its sector. Despite a 24.8% gain over the last six months that surpasses XLF’s 17.8% growth, its annual increase of 21.6% lags behind XLF’s impressive 31.2% returns.
Q3 Earnings Report Reveals Challenges
After KeyCorp released its Q3 earnings report on October 17, the stock fell 2.5%. The company faced a net loss of $446 million, contrasting sharply with a net income of $267 million from the same quarter last year. This decline resulted from a securities portfolio repositioning aimed at improving future earnings, capital, and liquidity. Despite this setback, the non-GAAP EPS adjusted for one-time items was $0.30, surpassing analysts’ expectations by 11.1%.
Positive Developments in Net Interest Income
On a bright note, KeyCorp’s adjusted net interest income rose by 4.4% year-over-year, reaching $964 million. This growth stems from the maturation of low-yielding securities and swaps. The company’s credit risk profile and expenses have remained stable, leading to optimism about future performance and stakeholder value.
Market Position Relative to Competitors
KeyCorp has significantly outperformed its rival, Truist Financial Corporation (TFC), which saw gains of 17.4% over the past six months and 19.7% returns over the past year.
Analyst Outlook on KeyCorp
Among the 18 analysts monitoring KEY stock, the consensus rating is a “Moderate Buy.” The average price target is set at $20, suggesting a 15.1% upside potential from current prices.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
