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1. Company Snapshot

1.a. Company Description

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States.It operates in two segments, Consumer Bank and Commercial Bank.The company offers various deposits, investment products and services; and personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, investment, cash management, portfolio management, and trust and related services to individuals and small and medium-sized businesses.


It also provides a suite of banking and capital market products, such as syndicated finance, debt and equity capital market products, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory, and public finance, as well as commercial mortgage loans comprising consumer, energy, healthcare, industrial, public sector, real estate, and technology loans for middle market clients.In addition, the company offers community development financing, securities underwriting, brokerage, and investment banking services.As of December 31, 2021, it operated through a network of approximately 999 branches and 1,317 ATMs in 15 states, as well as additional offices, online and mobile banking capabilities, and a telephone banking call center.


KeyCorp was founded in 1849 and is headquartered in Cleveland, Ohio.

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1.b. Last Insights on KEY

KeyCorp's recent performance is driven by several positive factors. The company's Q3 earnings beat estimates, with a 36.7% year-over-year increase, driven by higher net interest and non-interest income. Additionally, KeyCorp projects record 2025 revenues, driven by stronger fee income momentum and disciplined expenses. The company's improved valuation, strong earnings growth expectations, and active share buybacks also contribute to its positive outlook. Furthermore, anticipated Federal Reserve interest rate cuts are expected to support consumer activity and business expansion. Analysts have a "Buy" recommendation on the stock.

1.c. Company Highlights

2. KeyCorp's 2025 Earnings Report: A Strong Finish with Promising Guidance

KeyCorp reported fourth-quarter 2025 earnings of $0.43 per share, with revenue exceeding $2 billion, up 12% year-over-year on an adjusted basis. The actual EPS came out at $0.4657, beating estimates of $0.38. Expenses grew 2%, and net interest income was above the target, with a net interest margin of 2.82%. Asset quality metrics improved, with net charge-offs declining sequentially. The company repurchased $200 million of common stock and plans to buy back at least $300 million in the first quarter and similar amounts throughout 2026. Full-year 2025 revenue was a record, up 16% year-over-year, with net interest income and fee revenue growing greater than projected.

Publication Date: Jan -21

📋 Highlights
  • 2025 Full-Year Revenue Growth:: KeyCorp achieved a record 16% year-over-year revenue growth, driven by 1,200 bps of operating leverage and net interest income/fee revenue exceeding projections.
  • Capital Return Commitment:: The company repurchased $200M in Q4 2025, plans $300M+ in Q1 2026, and intends to reduce CET1 to 9.5-10% by 2026 via $1.3B+ in buybacks this year.
  • Net Interest Margin Expansion:: Q4 2025 margin at 2.82%, with guidance for 3-3.05% in 2026 and 3.25% by 2027, driven by fixed-rate asset repricing and loan book remix.
  • Expense Growth Control:: 2025 expenses up 4.6%, but 2026 guidance targets 3-4% growth, implying 300-400 bps of positive operating leverage despite $100M annual AI investments.
  • Return on Equity Target:: Aims for 15%+ RoTE by 2027, supported by 5-6% revenue growth, 15%+ ROTC by 2025, and 16-19% long-term ROTC through balance sheet optimization.

Financial Performance and Guidance

The company expects 2026 revenue growth of about 7%, driven by net interest income and fee growth. They anticipate returning to shareholders through share repurchases and dividend payments, targeting a CET1 ratio of 9.5-10% by 2026. The guidance for 2026 is a little softer than high expectations, but Clark Khayat notes that it embeds a level of conservatism in the macro backdrop. Analysts estimate next year's revenue growth at 6.1%.

Valuation Metrics

To understand what's priced in, we can look at KeyCorp's valuation metrics. The current P/TBV is around 1.13, and the dividend yield is 3.89%. The net interest margin is expected to expand to 3-3.05% by the end of 2026 and 3.25% by 2027. With a ROE of 9.26% and a ROIC of 4.13%, the company's profitability metrics are in line with industry standards.

Business Outlook

The company is optimistic about its future prospects, with a focus on growing revenue and improving returns. The goal is to achieve a 15% return on tangible equity (RoTE) by 2027, and management believes the company has a clear path to get there. The investment banking business is expected to grow 5%, driven by recent hires and a strong backlog. The commercial real estate business is also expected to grow, with a price increase of 7-8% this year.

Capital Management

The company's CET1 target is 9.5-10% over time, with a current level of 10.3% on a marked basis and 11.7% on a reported basis. They expect to burn down to 10% by 2026 through share repurchases, including $1.3 billion this year, and potentially $700 million more. The company is open to complimentary fee-based and capability-enhancing acquisitions and is actively having discussions with potential targets.

3. NewsRoom

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Rep. Gilbert Ray Cisneros, Jr. Purchases Shares of KeyCorp (NYSE:KEY)

Feb -22

Source: defenseworld.net

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Keyera Q4 Earnings Call Highlights

Feb -15

Source: defenseworld.net

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What Fueled KEY's NII Expansion in 2025 Despite Easing Rates

Feb -13

Source: zacks.com

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Keyera Corp. (KEY:CA) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

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69,214 Shares in KeyCorp $KEY Acquired by Caisse Des Depots ET Consignations

Feb -12

Source: defenseworld.net

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KeyCorp (KEY) Presents at Bank of America Financial Services Conference 2026 Transcript

Feb -10

Source: seekingalpha.com

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KeyCorp (NYSE:KEY) Reaches New 52-Week High Following Analyst Upgrade

Feb -10

Source: defenseworld.net

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KeyCorp (KEY) Presents at UBS Financial Services Conference 2026 Transcript

Feb -09

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.59%)

6. Segments

Commercial Bank

Expected Growth: 6.4%

KeyCorp's 6.4% growth is driven by strong loan growth, fueled by a robust commercial and industrial lending pipeline, as well as solid deposit growth. Additionally, the bank's focus on digital transformation, cost savings initiatives, and strategic acquisitions have contributed to its growth momentum.

Consumer Bank

Expected Growth: 4.77%

KeyCorp's Consumer Bank segment growth of 4.77% is driven by increasing consumer spending, low unemployment rates, and rising wages. Additionally, the bank's strategic investments in digital transformation, expansion of its branch network, and targeted marketing efforts have contributed to the growth. Furthermore, the bank's focus on customer experience and relationship-building has led to increased customer loyalty and retention.

Other

Expected Growth: 5.83%

KeyCorp's 5.83% growth is driven by strategic acquisitions, expansion into high-growth markets, and a focus on digital transformation. Additionally, the company's diversified revenue streams, including investment banking and wealth management, contribute to its growth. Furthermore, KeyCorp's strong risk management practices and solid capital position enable it to invest in growth initiatives.

7. Detailed Products

Consumer Banking

KeyCorp's consumer banking segment offers a range of personal banking products and services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

KeyCorp's commercial banking segment provides financial solutions to small and medium-sized businesses, including cash management, lending, and treasury services.

Corporate Banking

KeyCorp's corporate banking segment offers customized financial solutions to large corporations, including capital markets, treasury services, and risk management.

Investment Banking

KeyCorp's investment banking segment provides advisory services, capital markets, and transaction execution to corporations, governments, and financial institutions.

Wealth Management

KeyCorp's wealth management segment offers investment management, trust services, and financial planning to individuals, families, and institutions.

8. KeyCorp's Porter Forces

Forces Ranking

Threat Of Substitutes

KeyCorp operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

KeyCorp's customers have significant bargaining power due to the availability of alternative banking services. The company needs to maintain strong relationships with its customers to retain their business.

Bargaining Power Of Suppliers

KeyCorp has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power in supplier relationships.

Threat Of New Entrants

The banking industry has significant barriers to entry, including regulatory hurdles and capital requirements. This limits the threat of new entrants and allows KeyCorp to maintain its market position.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. KeyCorp needs to maintain its competitive edge through innovative products and services to stay ahead of its rivals.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.74%
Debt Cost 8.57%
Equity Weight 39.26%
Equity Cost 10.36%
WACC 9.27%
Leverage 154.71%

11. Quality Control: KeyCorp passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Regions Financial

A-Score: 6.5/10

Value: 6.2

Growth: 4.8

Quality: 7.6

Yield: 8.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
First Horizon

A-Score: 6.0/10

Value: 4.3

Growth: 4.7

Quality: 6.4

Yield: 7.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
FNB

A-Score: 6.0/10

Value: 5.4

Growth: 5.3

Quality: 5.4

Yield: 7.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Zions Bank

A-Score: 5.9/10

Value: 7.0

Growth: 6.9

Quality: 6.2

Yield: 6.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Comerica

A-Score: 5.8/10

Value: 4.3

Growth: 4.6

Quality: 6.2

Yield: 7.0

Momentum: 7.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Key

A-Score: 5.5/10

Value: 5.4

Growth: 2.7

Quality: 5.2

Yield: 8.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.2$

Current Price

22.2$

Potential

-0.00%

Expected Cash-Flows