RBC Capital Markets has raised KeyCorp’s (NYSE: KEY) price target from $17 to $18 and maintained an Outperform rating, reflecting confidence in the bank’s performance after a strong third quarter in 2024.
Analysts noted KeyCorp’s solid core growth and improvements in net interest income (NII) and margin, expecting this trend to continue into 2025. Strategic moves like bond portfolio restructuring and investment from Bank of Nova Scotia are key to NII growth, contributing to the higher price target.
KeyCorp has strong credit quality, with a Common Equity Tier 1 (CET1) ratio of 10.8%, suggesting it will outperform prior credit cycles. In Q3 2024, the bank reported a 7% rise in NII and strong investment banking fees, alongside a $821 million initial investment from Scotiabank.
Despite a projected decline in loan forecasts for 2024, KeyCorp’s management is cautiously optimistic, anticipating stabilization in nonperforming loans and manageable expense growth.
InvestingPro Insights
Alongside RBC’s positive outlook, InvestingPro notes KeyCorp’s $16.01 billion market cap and a 4.75% dividend yield, highlighting its strong shareholder return commitment with a 53-year dividend history. KeyCorp’s 1-year price total return is an impressive 71.18%.
However, KeyCorp’s P/E ratio is very high at 5,851.24, which may be due to temporary factors or future growth expectations, something investors should consider. For more detailed insights, InvestingPro offers additional analyses on KeyCorp.
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