KeyCorp's Q1 Draws Mixed Analyst Reviews, Stock Heads Higher


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KeyCorp (NYSE:KEY) reported first-quarter earnings of 12 cents per share Thursday, significantly missing the consensus estimate of 32 cents per share.

The bank posted a higher provision expense in the quarter of $359 million.

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BofA Securities Drops Bullish KeyCorp Stance 

BofA’s Erika Najarian downgraded KeyCorp from Buy to Neutral and reduced the price target from $13 to $10.

The bank has higher exposure to vulnerable industries, and there could be material net interest margin compression in the second quarter, Najarian said in a Friday downgrade note.

KeyCorp’s balance sheet growth could drive net interest income growth in 2020, the analyst said. 

KeyCorp 2.0 Is Stronger, Says Bullish RBC

RBC Capital Markets analyst Gerard Cassidy maintained an Outperform rating with a $16 price target. 

Although KeyCorp collapsed during the 2008 financial crisis, this is unlikely to occur in the current recession, the analyst said. The bank’s pre-provision net revenue was around $232 million in 2008, a figure that has grown to $527 million in the first quarter of 2020, he said. 

KeyCorp Finds A Home On Wedbush's Best Ideas List


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Wedbush’s Peter Winter maintained an Outperform rating on the stock with a $16 price target.

KeyCorp has “done a tremendous amount of work to de-risk the loan portfolio and is better positioned for this downturn from a capital, liquidity and credit standpoint,” the analyst said in a Thursday note.  

The bank has limited exposure to the hard-hit areas and is witnessing a shift in loan growth and an uptick in consumer loan growth, he said. 

KeyCorp Expects More Reserve Building By KeyCorp

Wells Fargo analyst Mike Mayo maintained an Underweight rating on KeyCorp with an $11 price target. 

The analyst said he expects more reserve builds in the second quarter and the back half of the year.

Wells Fargo reduced its earnings estimates for KeyCorp for 2020 and 2021 from $1.15 per share to 90 cents per share and from $1.25 per share to $1.15 per share, respectively, reflecting projections of pressure on revenue and further reserve builds.

KEY Price Action

Shares of KeyCorp were trading 9.94% higher at $10.73 at the time of publication Friday. 

Related Links:

Benzinga's Top Upgrades, Downgrades For April 17, 2020

Recap: KeyCorp Q1 Earnings


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorEarningsNewsDowngradesPrice TargetReiterationAnalyst RatingsbanksBofA SecuritiesErika NajarianGerard CassidyMike MayoPeter WinterRBC Capital MarketsWedbushWells Fargo