How Investors May Respond To KeyCorp (KEY) Rebounding Earnings and Lower Prime Rate in Q3 2025

• KeyCorp recently reported third quarter 2025 results, showing net interest income of US$1.18 billion and net income of US$489 million, a turnaround from a net loss a year earlier, alongside a reduction in its prime lending rate to 7.00 percent as of October 30, 2025.
• A particularly significant insight is that net loan charge-offs in the third quarter dropped to US$114 million, lower than both the prior year and prior quarters, indicating some improvement in loan performance.
• We'll explore how KeyCorp's combination of stronger earnings and a lower prime rate could reshape its investment narrative and future outlook.

Find companies with promising cash flow potential yet trading below their fair value.

KeyCorp Investment Narrative Recap

To be a KeyCorp shareholder, you need to believe in the bank’s ability to sustain higher earnings momentum while navigating competitive lending pressures and potential credit quality headwinds. The recent news of solid net income, improved net interest income, and reduced loan charge-offs signals progress for near-term earnings, but it does not materially alter the biggest current risk: a potential rise in nonperforming loans if asset quality slips.

Among the latest updates, the reduction of KeyCorp’s prime lending rate to 7.00 percent is most relevant here, as it reflects the company’s efforts to remain competitive in loan pricing. This change could influence net interest margins, the key catalyst for revenue growth, but also exposes KeyCorp to risks should loan demand or asset quality deteriorate further.

By contrast, investors should also be aware of risks tied to asset quality and signs of nonperforming loans that could undermine...

Read the full narrative on KeyCorp (it's free!)

KeyCorp's narrative projects $7.7 billion in revenue and $2.4 billion in earnings by 2027. This requires 10.5% yearly revenue growth and a $1.68 billion increase in earnings from the current level of $716 million.

Uncover how KeyCorp's forecasts yield a $21.65 fair value, a 24% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community put KeyCorp’s worth between US$21.46 and US$32.15 per share. While many participants focus on future catalysts like the outlook for net interest income, opinions on the company’s trajectory are quite divided and you may find alternative viewpoints to consider.

Explore 3 other fair value estimates on KeyCorp - why the stock might be worth just $21.46!

Build Your Own KeyCorp Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your KeyCorp research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free KeyCorp research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate KeyCorp's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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