KeyCorp (KEY) has caught the interest of investors lately, as its share price has shifted in tandem with changing market trends. The bank’s recent performance invites a closer look at how its fundamentals compare.
KeyCorp's share price has moved with the market's mood swings over the past year, recently closing at $17.62. While short-term momentum has softened after a modest 30-day gain, its one-year total shareholder return remains slightly negative. This signals that the road ahead may hinge on renewed confidence or shifting fundamentals.
If recent movements have you wondering where else opportunity may be building, this could be the perfect time to broaden your search and discover fast growing stocks with high insider ownership
With the stock near $17.62 and both analyst price targets and internal valuations suggesting upside, the question now becomes: is KeyCorp an undervalued pick, or is the market already factoring in any future gains?
Advertisement
Most Popular Narrative: 18.1% Undervalued
KeyCorp's widely followed narrative places its fair value at $21.51, well above the recent close of $17.62. This sets the stage for a discussion driven by robust growth expectations and shifts in revenue drivers.
The anticipated shift from net interest income (NII) headwinds to tailwinds is due to a pivot in fixed asset repricing and the structure of swap and treasury maturities. This is expected to significantly enhance NII in the forthcoming quarters, positively impacting revenue growth. Improved deposit costs dynamics, with a more stable increase in deposit costs and a strategic focus on high-value consumer and commercial deposits, are aimed at fortifying net interest margins and overall profitability.
Why do analysts think KeyCorp deserves a premium? The foundation of this narrative is bold profit margin expansion, underpinned by ambitious earnings and revenue growth. Discover which assumptions give this story its upside surprise.
However, persistent asset quality challenges or weaker loan demand could quickly undermine the current optimism about KeyCorp's future earnings potential.
Looking at valuation through the lens of price-to-earnings, KeyCorp trades at 20.7x earnings, which is noticeably higher than both the US Banks industry average of 11.2x and its peers at 11.9x. Even relative to its fair ratio of 17.4x, KEY looks expensive. This discrepancy raises important questions about valuation risk: has the market run too far ahead, or is optimism justified?
If the prevailing narratives do not match your perspective, you are welcome to dig into KeyCorp’s performance and build your own investment thesis in just a few minutes. Do it your way
Don’t let great opportunities slip past you. The right screener can help you discover stocks that may offer growth potential, strong dividends, or exposure to breakthrough tech trends.
Position yourself at the cutting edge by acting on the latest advances with these 24 AI penny stocks.
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.
Valuation is complex, but we're here to simplify it.
Discover if KeyCorp might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States.
