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KeyCorp beat Q2 expectations, with strong net interest income and solid core loan performance. The current interest rate environment supports net interest income growth, but potential Fed rate cuts create a neutral risk profile. KeyCorp's valuation has recovered post-2023 crisis, now trading at historical price-to-book averages, limiting upside potential.
Keycorp gets upgraded to a buy, from my prior hold rating, as my bullishness on this stock returns. It has proven it can grow its non-loan business, generate dividend growth, and improve its balance sheet risk profile as well as keep investment-grade credit ratings. Beyond its Ohio origins, this brand has managed to penetrate multiple US regions.
KeyCorp's capital position has strengthened significantly, supporting growth and improved net interest margin through strategic asset repositioning and a stake sale to Scotiabank. Loan growth is accelerating, deposit costs are declining, and asset yields are rising, driving a 28% increase in net interest income year-over-year. Credit quality remains solid with healthy reserves, and upgraded guidance reflects building momentum as Key transitions to a growth-focused strategy.
KeyCorp (NYSE:KEY ) Q2 2025 Earnings Conference Call July 22, 2025 9:00 AM ET Company Participants Brian Mauney - Director of Investor Relations Christopher Gorman - Chairman, President & CEO Clark Khayat - Chief Financial Officer Mohit Ramani - Chief Risk Officer Conference Call Participants Ryan Nash - Goldman Sachs Group, Inc., Research Division Robert Siefers - Piper Sandler & Co., Research Division Ebrahim Poonawala - BofA Securities, Research Division Christopher McGratty - Keefe, Bruyette, & Woods, Inc., Research Division Kenneth Usdin - Bernstein Autonomous LLP Manan Gosalia - Morgan Stanley, Research Division L. Erika Penala - UBS Investment Bank, Research Division John Pancari - Evercore ISI Institutional Equities, Research Division Matthew O'Connor - Deutsche Bank AG, Research Division Operator Good morning, and welcome to KeyCorp's Second Quarter 2025 Earnings Conference Call.
KEY beats Q2 estimates with a 40% y/y EPS jump, boosted by strong NII and fee income despite rising expenses and provisions.
KeyCorp is increasing its number of frontline bankers and client advisers by 10% and has boosted its investment in technology by nearly $100 million this year to support the company's growth.
The headline numbers for KeyCorp (KEY) give insight into how the company performed in the quarter ended June 2025, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.
KeyCorp (KEY) came out with quarterly earnings of $0.35 per share, beating the Zacks Consensus Estimate of $0.34 per share. This compares to earnings of $0.25 per share a year ago.
KEY is seeing favorable earnings estimate revision activity and has a positive Zacks Earnings ESP heading into earnings season.
Beyond analysts' top-and-bottom-line estimates for KeyCorp (KEY), evaluate projections for some of its key metrics to gain a better insight into how the business might have performed for the quarter ended June 2025.
KEY's Q2 earnings are expected to have been boosted by fee income and NII, but rising provisions are likely to have weighed on it.