KEY

Based on a comprehensive analysis of technical indicators, fundamentals, valuation, and risk, KEY presents a mixed but cautiously optimistic profile for investors.

Technical & Fundamental Outlook Technically, KEY is in a strong position near its 52-week high, with significant outperformance over the past quarter. However, recent momentum has stalled, suggesting potential consolidation. Fundamentally, the company shows stable revenue growth and robust profitability margins, but operational efficiency metrics like ROE and asset turnover are low, and the weak interest coverage ratio is a concern regarding financial resilience.

Valuation & Risk Assessment Valuation sends mixed signals: the attractive forward PE and PEG ratios suggest potential undervaluation and strong growth prospects, but the extremely high EV/EBITDA is a red flag for overvaluation. The stock carries moderate volatility risk, evidenced by its beta and substantial past drawdown, which is typical for the banking sector.

Investment Recommendation KEY is a CONDITIONAL BUY for investors with a moderate risk tolerance. The stock's reasonable valuation on earnings growth metrics and strong recent price momentum are positive. However, investors must be comfortable with the sector's inherent volatility and should monitor the company's ability to improve its operational efficiency and interest coverage. This is not a recommendation for conservative investors seeking stable, low-volatility returns.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is the 12-month outlook for KEY:

12-Month Outlook for KEY

The outlook for KEY over the next year is cautiously optimistic, hinging on its ability to leverage its strong profitability and reasonable earnings-based valuation. Key catalysts include the potential for the banking sector to benefit from a stable or rising interest rate environment, which could improve its weak interest coverage ratio and boost earnings. The primary risks are sector-wide volatility and the company's own operational inefficiencies, particularly its low ROE, which could limit upside potential if not addressed. While a specific analyst target is unavailable, the current price near 52-week highs suggests a target range in the low-to-mid $20s is plausible, contingent on the company demonstrating improved financial resilience.

Wall Street Consensus

Most Wall Street analysts are optimistic about KEY's 12-month outlook, with consensus target around $20.95, indicating expected upside potential.

Overall, KEY has investment potential but also faces challenges. Here are key factors to weigh before investing.

Of Counsel: KEY has demonstrated strong outperformance versus the market over the last quarter, despite more modest recent gains, positioning it near its 52-week high with elevated volatility.

Over the last three months, the stock has delivered impressive gains of nearly 15%, significantly outperforming the broader market by over 11%. However, the one-month change of 0.77% indicates a notable slowdown in momentum, suggesting the rally may be consolidating or encountering resistance after a substantial upward move.

The current price sits just 4.1% below the 52-week high of $21.75, indicating the stock is in a strong technical position but may be approaching overbought territory. With a beta above 1, the stock exhibits higher volatility than the market, which is corroborated by its substantial 27.7% maximum drawdown over the past year, highlighting the inherent risk alongside its recent strong performance.

Of course. Here is a fundamental analysis of KEY based on the provided data.

1. Revenue & Profitability

KEY demonstrated stable performance in Q3 2025, with revenue growing modestly to $2.83 billion from $2.80 billion in Q2. Profitability is strong, with a robust gross profit margin of 62.8%, indicating effective control over the cost of goods sold. The company translated this into a healthy net income margin of 17.3%, showing efficient conversion of revenue into bottom-line profit, with net income rising from $425 million to $489 million quarter-over-quarter.

2. Financial Health

The company maintains a moderate level of leverage, with a debt-to-equity ratio of 0.61, suggesting a balanced approach to financing that is not overly reliant on debt. However, the interest coverage ratio of 0.64 is a point of concern, as it indicates that operating income is only marginally sufficient to cover interest expenses, which could pressure profitability if interest rates rise or earnings decline. The low current and quick ratios also warrant attention regarding short-term liquidity.

3. Operational Efficiency

KEY's operational efficiency shows room for improvement. The return on equity (ROE) of 2.4% is relatively low, suggesting the company is not generating a high return for its shareholders based on their equity. The asset turnover ratio is also very low at 0.015, indicating that the company is not generating a high volume of sales from its asset base. This combination of low ROE and asset turnover points to potential challenges in utilizing its capital and assets effectively to drive growth.

KEY Valuation Analysis

KEY's forward PE of 10.5 suggests a reasonable valuation compared to its trailing PE of 21.3, indicating anticipated earnings growth. The PEG ratio of 0.61 signals potential undervaluation, as it is well below 1, implying the stock's price may not fully reflect its growth prospects. However, the extremely high EV/EBITDA of 51.3 is a significant concern, pointing to elevated enterprise value relative to operating cash flow and potential overvaluation on this metric. The PB ratio of 1.14 is modest, implying the stock is trading close to its book value.

Without specific industry average data, a precise peer comparison is limited. Generally, a forward PE around 10.5 would be considered attractive if below the broader market average, suggesting undervaluation. The PS ratio of 3.59 is a key metric to contextualize; it would need to be compared against industry peers to determine if KEY's sales are efficiently priced, but in isolation, it indicates a moderate premium on revenue.

Of course. Here is a risk analysis for KEY based on the provided metrics.

1. Volatility Risk KEY exhibits moderate volatility risk, with a beta slightly above 1.0, indicating it tends to move more than the broader market. Combined with a significant one-year maximum drawdown of -27.7%, the stock has demonstrated a capacity for substantial price declines during recent market downturns. This suggests investors should be prepared for above-average price swings relative to the overall market.

2. Other Risks The negligible short interest is a positive signal, implying that professional investors do not see a compelling near-term risk of the stock's price falling significantly. However, this data point alone does not eliminate other fundamental risks, such as exposure to regional economic downturns or interest rate sensitivity, which are common for banking stocks like KEY. The lack of liquidity data prevents a full assessment of trading liquidity risk.