DA Davidson Boosts KeyCorp (KEY) Price Target Amid Optimistic Outlook | KEY Stock News

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2 days ago

DA Davidson has increased its price target for KeyCorp (KEY, Financial), raising it from $19 to $21 while maintaining a Buy rating on the stock. The firm is optimistic about KeyCorp's performance, citing confidence from the company’s management that it can achieve or surpass its revised guidance. This confidence is attributed to a favorable net interest margin outlook and robust loan pipelines despite prevailing macroeconomic uncertainties.

Wall Street Analysts Forecast

Based on the one-year price targets offered by 19 analysts, the average target price for KeyCorp (KEY, Financial) is $19.86 with a high estimate of $22.20 and a low estimate of $17.00. The average target implies an upside of 6.14% from the current price of $18.71. More detailed estimate data can be found on the KeyCorp (KEY) Forecast page.

Based on the consensus recommendation from 24 brokerage firms, KeyCorp's (KEY, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.

Based on GuruFocus estimates, the estimated GF Value for KeyCorp (KEY, Financial) in one year is $15.85, suggesting a downside of 15.29% from the current price of $18.71. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the KeyCorp (KEY) Summary page.

KEY Key Business Developments

Release Date: July 22, 2025

  • Earnings Per Share (EPS): $0.35
  • Revenue Growth: Up 21% year over year
  • Expenses Growth: Up 6% excluding charitable contribution
  • Pre-Provision Net Revenue (PPNR): Increased by $44 million sequentially
  • Commercial Loan Growth: Achieved full-year plan of $3 billion growth as of June 30
  • Deposit Costs: Managed below 2%
  • Fee Income Growth: Up 10% year over year
  • Assets Under Management: Reached a record $64 billion
  • Net Charge Offs: $102 million
  • Tangible Book Value Per Share: Increased 3% sequentially and 27% year over year
  • Average Loans: Up $1.4 billion sequentially
  • Net Interest Margin (NIM): Increased by 8 basis points to 2.66%
  • Investment Banking Fees: $178 million, up 41% year over year
  • Commercial Mortgage Servicing Fees: Grew approximately 15% year over year
  • Non-Interest Expenses: $1.15 billion, increased 2% from the prior quarter
  • Common Equity Tier 1 (CET1) Ratio: 11.7% at quarter end
  • Net Interest Income Growth Guidance: Revised to 20% to 22% for full year 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • KeyCorp (KEY, Financial) reported a strong second quarter with earnings per share of $0.35, despite adding $36 million to loan loss reserves.
  • Revenues increased by 21% year-over-year, while expenses rose only 6% excluding charitable contributions.
  • Commercial loan growth was robust, achieving the full-year target of $3 billion by mid-year.
  • Investment banking had its second-best first half in history, with fees growing 10% year-over-year.
  • Credit metrics improved, with declines in net charge-offs, criticized loans, and delinquencies.

Negative Points

  • Provision for credit losses was $138 million, driven by loan growth and macroeconomic scenario deterioration.
  • Average deposits declined slightly, reflecting reductions in higher-cost commercial client balances.
  • Interest-bearing deposit costs decreased, but competition for deposits is expected to increase.
  • Loan growth guidance was revised, with expectations of a 1-3% decline in average loans for the full year.
  • The macroeconomic environment remains uncertain, impacting the company's ability to predict future performance.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.