KeyCorp (KEY) Stock Analysis
By stockpickr AI | March 3, 2026 | 10 min read
Investment Summary
KeyCorp appears undervalued based on the DCF analysis, trading below its calculated intrinsic value while operating within the stable regional banking sector.
Investment Recommendation
Buy
Fair Value: $15.88
Current Price: $12.45
Upside/Downside: +27.55%
The DCF analysis calculates an implied fair value significantly higher than the current market price of $12.45, suggesting an upside potential. The valuation is primarily driven by stabilizing future free cash flows derived from a projected normalization of NII following the anticipated rate cycle peak.
Key Metrics
- Market Cap: $14.03B
- P/E Ratio: 10.12x
- Forward P/E: 10.85x
- Revenue Growth (YoY): -3.6%
- Net Margin: 20.5%
- ROE: 7.7%
- Debt/Equity: 10.07
- Dividend Yield: 5.77%
Strengths
- Strong P/B ratio of 0.87, suggesting the stock may be trading below tangible book value.
- High dividend yield of 5.77%, providing significant income to shareholders.
- Net interest income remains substantial despite recent flattening, supported by a diversified loan portfolio.
- Solid net margin of 20.5% as of the latest TTM.
Risk Factors
- Sensitivity to interest rate fluctuations, which directly affects NII and profitability.
- The high Debt-to-Equity ratio (10.07) indicates high leverage, a common characteristic but a risk factor in banking.
- The last year's revenue shows a modest year-over-year decline due to the challenging macroeconomic environment for regional banks.