Citi analysts upgraded KeyCorp (NYSE:KEY) from Neutral to Buy, raising the price target to $20.00 on the stock. The move comes as the recent sector pullback presents an attractive entry point for investors.
KeyCorp ranks among the best value stocks based on Citi’s implied cost of equity valuation screen. Despite growing macroeconomic concerns and mounting credit risk fears, the bank is well-positioned with lower-than-average credit exposure, particularly in consumer and commercial real estate (CRE) segments. Additionally, its proforma Common Equity Tier 1 (CET1) ratio stands at a robust 9.8%, reinforcing its financial stability.
Citi sees KeyCorp’s earnings power strengthening over time, projecting EPS to reach approximately $2.00 by 2027, compared to the current $1.55 estimate for 2025. This outlook suggests the stock is trading at just 8x normalized earnings, making it an attractive valuation play.
Further supporting the bullish stance, KeyCorp’s management has indicated plans to approach the board about reinstating a share buyback authorization, which could provide additional upside.
