Wells Fargo analyst Mike Mayo has maintained their bullish stance on KEY stock, giving a Buy rating yesterday.
Mike Mayo has given his Buy rating due to a combination of factors including KeyCorp’s (KEY) unique balance sheet positioning, low commercial real estate (CRE) exposure, and continued optimism in capital markets. The CEO of KeyCorp presented a scenario where no Federal Reserve rate cuts in 2024 would be beneficial for the bank, particularly in light of its swaps book and balance sheet repricing. This situation is notably advantageous when compared to other banks that are reliant on rate cuts to sustain or increase their net interest margins (NIMs), as they face upward pressure on deposit repricing.
Moreover, KeyCorp’s strategic decision to reduce exposure to “gateway” cities and thus limit multifamily and office loan concentrations has positioned it with less risk in the CRE market. The bank’s proactive approach to managing investment banking attrition and its potential to attract new talent post-bonus season further underscores Mayo’s positive outlook. Additionally, despite an uptick in special servicing volumes for CRE, the management’s distinction between the housing shortage and the surplus of office space supports the viewpoint that KeyCorp is well-equipped to navigate the current financial landscape.
In another report released yesterday, Bank of America Securities also maintained a Buy rating on the stock with a $16.00 price target.
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Based on the recent corporate insider activity of 56 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KEY in relation to earlier this year.
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KeyCorp (KEY) Company Description:
KeyCorp operates as bank holding company. The company operates through the following segments: Consumer Bank and Commercial Bank. The Consumer Bank segment offers deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services. The Commercial Bank segment engages in serving the needs of middle market clients in seven industry sectors: consumer, energy, healthcare, industrial, public sector, real estate, and technology The company was founded in 1958 and is headquartered in Cleveland, OH.
Read More on KEY:
- IRS sues FDIC over Silicon Valley Bank’s $1.4B tax debt, Reuters says
- KeyCorp put volume heavy and directionally bearish
- KeyCorp price target raised to $16 from $12 at Morgan Stanley
- KeyCorp price target raised to $17 from $16 at Piper Sandler
- KeyCorp price target lowered to $16 from $17 at DA Davidson
