On Wednesday, Piper Sandler reaffirmed its Overweight rating on KeyCorp (NYSE:NYSE:KEY) with a steady price target of $17.00. The financial services company, KeyCorp, presented a mid-quarter update at an industry conference, leading to the analyst's statement.
KeyCorp indicated that their second quarter 2024 net interest income (NII) might fall short of the company's own expectations but should align closely with Piper Sandler's prior estimates, differing by approximately $1 million. The slight variance is attributed to slower-than-anticipated loan growth, although the full-year 2024 net interest income forecast remains unchanged.
Additionally, KeyCorp forecasted that investment banking (IB) revenues for the second quarter of 2024 could decline more than initially projected. Despite this, the management conveyed confidence in meeting the full-year 2024 fee revenue guidance. The company also mentioned that net charge-offs (NCOs) relative to average loans might reach the high end of their guidance range.
This is not due to an increase in the dollar amount of NCOs but rather because of a smaller base of average loans than previously estimated.
KeyCorp's update provides investors with insights into the company's performance expectations for the upcoming quarter and the remainder of the year. The company's guidance on net interest income, investment banking revenues, and net charge-offs are key metrics for shareholders and analysts monitoring the financial health and operational performance of KeyCorp. Piper Sandler's continued support with an Overweight rating suggests a positive outlook on the stock's performance potential.
In other recent news, KeyCorp has been in the spotlight with a series of events. The financial company reported a decrease in Q1 earnings to $0.22 per share, a slight dip from the consensus estimate of $0.23, and down from $0.30 in the same quarter of the previous year. Despite this, Argus has raised the stock price target for KeyCorp from $15 to $16, citing the expectation of decreasing deposit costs and an attractive dividend yield.
RBC Capital Markets also increased its price target for KeyCorp from $15 to $16, maintaining an Outperform rating on the stock. The firm pointed out positive prospects for the bank's net interest income over the coming quarters and highlighted the company's strong capital position.
In addition, KeyCorp announced dividends for the second quarter of 2024 across its common and preferred stock categories. This includes a cash dividend of $0.205 per common share and various dividends for its series of preferred stock.
Lastly, amid a challenging financial landscape for US mid-sized banks, KeyCorp is bracing for a tough year. The company, along with other regional banks, reported lower first-quarter profits and is expected to see a decrease in net interest income for the year.
Despite these challenges, analysts remain optimistic about KeyCorp's ability to navigate the financial headwinds.
InvestingPro Insights
In light of KeyCorp's recent financial forecast and Piper Sandler's reaffirmed Overweight rating, real-time data from InvestingPro offers additional insights. KeyCorp's market capitalization stands at $12.65 billion, with a Price/Earnings (P/E) ratio of 17.16, reflecting investor sentiment about the company's earnings potential. Notably, the company has a robust dividend yield of 6.11%, which is particularly attractive to income-focused investors. This aligns with the InvestingPro Tips highlighting that KeyCorp has not only maintained but raised its dividend for 53 consecutive years, underscoring a strong commitment to returning value to shareholders.
Despite a revenue decline over the last twelve months, analysts predict KeyCorp will be profitable this year, which is a positive sign for potential investors. Those interested in a deeper analysis of KeyCorp's financials and future prospects can find additional InvestingPro Tips by visiting https://www.investing.com/pro/KEY. Moreover, for those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With several more tips available on InvestingPro, investors can gain a comprehensive understanding of KeyCorp's financial landscape and make more informed investment decisions.
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