KeyCorp’s Challenge: Mixed Earnings Amid Market Underperformance
With a market cap of around $17 billion, KeyCorp (KEY) stands as a diversified financial services firm, primarily through its subsidiary, KeyBank National Association. The company provides a variety of retail and commercial banking products and services across the U.S., catering to consumers, businesses, and institutions through its Consumer Bank and Commercial Bank segments.
Market Performance Overview
Over the past 52 weeks, KeyCorp has struggled relative to the broader market. The stock has grown 2.3%, whereas the S&P 500 Index ($SPX) has surged by 12.3%. Moreover, KeyCorp shares are down 10.9% year-to-date, compared to the S&P’s 3.3% decline during the same period.
Comparison with Financial Sector
KeyCorp has also fallen short against the Financial Select Sector SPDR Fund’s (XLF) impressive 21.7% return over the same span.
Quarterly Earnings Insights
On April 17, shares of KeyCorp rose 1.4% following the release of its better-than-expected Q1 2025 results. The company reported an adjusted EPS of $0.33, surpassing consensus estimates and marking a 50% increase year-over-year. Additionally, total revenues jumped 15.7% to $1.8 billion, powered by a 24.7% surge in net interest income and a 56 basis point improvement in net interest margin.
Future Earnings Projections
Looking ahead, analysts project KEY’s EPS to rise 23.3% year-over-year to $1.43 for the current fiscal year ending in December 2025. The company’s earnings surprise history is positive, as it exceeded consensus estimates in the last four quarters.
Analyst Ratings and Pricing Targets
Among the 20 analysts monitoring the stock, the consensus rating is a “Moderate Buy.” This includes 10 “Strong Buy” ratings, two “Moderate Buys,” and eight “Holds.” This rating configuration reflects improved sentiment compared to three months ago, when only eight analysts gave “Strong Buy” ratings.
On April 22, Truist analyst Brian Foran lowered KeyCorp’s price target to $16 while maintaining a “Hold” rating. This adjustment is attributed to slightly lower investment banking fees and net interest income. Additionally, the firm reduced its EPS estimates for 2025 and 2026 by 1% to $1.45 and $1.75, respectively, partially balanced by lower credit losses and anticipated share buybacks in late 2025.
Currently, KeyCorp is trading below the mean price target of $17.53. The highest price target of $20 suggests a potential upside of 29.1% from current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the disclosure policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
