Citi Downgrades KeyCorp, Street Views 'A Bit Too High'

KeyCorp KEY is unlikely to see strong gains from mortgage fees in the near-term, while Street estimates may be "a bit too high" an analyst said Monday.

Citi's Keith Horowitz downgraded the regional banking company to Neutral, from Buy, and reduced his price target more than 6 percent to $15.

KeyCorp was down 1.4 percent at $13.95; shares are up more than 7 percent in the past month, mainly on the strength of fourth-quarter earnings that beat Wall Street's expectations last month.

Horowitz said KeyCorp is "close to being fully valued," noting that his 2015 earnings estimate is below consensus views.

The analyst cut his 2015 earnings forecast for KeyCorp by more than 4 percent to $1.05 a share, versus the consensus estimate of $1.12 a share.

Unlike other banks in its peer group, Keycorp is unlikely to benefit in the near-term from strong mortgage banking fee revenue gains, Horowitz said.

Horowitz also trimmed his forecast for the "normalized" Federal funds interest rate to 2 percent, from around 3 percent.