Citi has reaffirmed its Buy rating on KeyCorp (NYSE: NYSE:KEY), maintaining its $19.00 price target for the financial services company.
The assessment followed KeyCorp's recent earnings report, which Citi's analyst noted had core pre-provision net revenue (PPNR) largely matching their estimates.
The report indicated that while there were minor discrepancies in fees and expenses, these were mostly counterbalanced.
The management of KeyCorp provided guidance for the fourth quarter, anticipating a net interest income (NII) exit rate surpassing $1,020 million, slightly below the Visible Alpha consensus of $1,031 million. Additionally, they forecast a net interest margin (NIM) around 2.40%. The company's upward revisions to its full-year fee and expense guidance are expected to be offsetting.
KeyCorp experienced a slight increase in net charge-offs (NCOs) during the quarter. As a result, management now projects the 2024 NCOs to be in the range of 35-40 basis points. Despite this uptick, the company released reserves in the quarter. KeyCorp's Common Equity Tier 1 (CET1) ratio improved by 30 basis points, reaching 10.8% as risk-weighted assets (RWAs) decreased by 2%.
In other recent news, KeyCorp has been the focus of several significant developments. Goldman Sachs has maintained a Buy rating on KeyCorp, following the company's recent third-quarter earnings report. The bank reported a core earnings per share (EPS) of $0.30, slightly higher than the expected prediction of $0.28, mainly due to lower core expenses.
Barclays also maintained its Equalweight rating on KeyCorp, highlighting the company's EPS that exceeded expectations, due to better-than-anticipated net interest income and controlled expenses. However, Baird downgraded the stock from Outperform to Neutral and lowered the price target to $17 from the previous $18, citing a significant increase in the company's share value.
Citi maintains a positive stance on KeyCorp, keeping a Buy rating and a $19.00 price target for the financial services company's shares. The bank increased its EPS forecast for 2025 by $0.05 to $1.55. Piper Sandler confirmed its Overweight rating on KeyCorp with a steady price target of $18.00, indicating confidence in the bank's future financial performance.
InvestingPro Insights
KeyCorp's recent performance and Citi's positive outlook are further supported by real-time data from InvestingPro. The company's P/E ratio of 22.87 suggests that investors are willing to pay a premium for its earnings, potentially reflecting confidence in its future growth prospects. This aligns with Citi's Buy rating and $19.00 price target.
InvestingPro Tips highlight that KeyCorp has maintained dividend payments for 53 consecutive years, demonstrating a strong commitment to shareholder returns. This is particularly noteworthy given the company's current dividend yield of 4.63%, which may be attractive to income-focused investors. Additionally, KeyCorp has shown a large price uptick over the last six months, with InvestingPro data revealing a 25.95% price total return over this period.
These insights complement the earnings report discussed in the article, providing a broader picture of KeyCorp's financial health and market performance. For investors seeking a deeper understanding, InvestingPro offers 8 additional tips on KeyCorp, which could provide further context to the company's current position and future prospects.
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