Core Viewpoint - Wall Street anticipates flat earnings for KeyCorp in the upcoming quarter, with earnings per share (EPS) expected to remain at $0.38, while revenues are projected to increase by 10.3% to $1.94 billion compared to the previous year [3]. Earnings Expectations - The consensus EPS estimate for KeyCorp has been revised 0.87% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - A positive Earnings ESP of +1.20% suggests that analysts are optimistic about KeyCorp's earnings prospects, supported by a Zacks Rank of 2 [12]. Earnings History - In the last reported quarter, KeyCorp exceeded the EPS estimate of $0.38 by delivering $0.41, resulting in a surprise of +7.89% [13]. - Over the past four quarters, KeyCorp has consistently beaten consensus EPS estimates [14]. Market Reaction - The stock price may increase if the actual earnings surpass expectations, while a miss could lead to a decline [2]. - The sustainability of any immediate price change will depend on management's commentary during the earnings call [2].

Core Viewpoint - KeyBank will pay $7.77 million to settle allegations of seeking forgiveness for fraudulent loans from the Paycheck Protection Program (PPP) during the pandemic [1]. Group 1: Settlement Details - The settlement includes nearly $6 million in Small Business Administration loans, with allegations that a branch manager encouraged business owners to submit inflated loan applications regarding payroll expenses and employee numbers [3]. - The total settlement amount comprises $6.2 million in restitution [4]. - KeyBank did not admit wrongdoing and cooperated with the investigation [4]. Group 2: Legal Proceedings - The branch manager, Tommy Hawkins, pleaded guilty to a bank conspiracy charge and was sentenced to 65 months in prison in 2024 [5]. - Hawkins assisted individuals in submitting PPP loan applications that contained false information about employee numbers and payroll expenses, leading to the approval of at least 38 loans totaling approximately $5 million [6]. Group 3: Broader Context - As of November 2020, hundreds of investigations into PPP loan fraud were underway, with 73 defendants charged by the Justice Department [7]. - The U.S. Secret Service reported that criminals had misappropriated about $100 billion in pandemic relief funds [7].

Core Viewpoint - KeyCorp's unit will pay $7.77 million to settle allegations of violating the federal False Claims Act by submitting fraudulent Paycheck Protection Program loans for forgiveness [1][3] Group 1: Allegations and Settlement - The settlement is related to a branch manager in Conshohocken, Pennsylvania, who allegedly recruited business owners to inflate payroll expenses and employee counts in approximately 48 loan applications [2] - This fraudulent activity resulted in nearly $6 million in federal Small Business Administration loans, with the branch manager receiving incentive pay for opening accounts before the scheme was discovered [2][3] - The settlement includes about $6.2 million designated for restitution [3] Group 2: Legal Proceedings - The branch manager, Tommy Hawkins, pleaded guilty to a bank fraud conspiracy charge and was sentenced to 65 months in prison in 2024 [3] - Six other individuals faced related criminal charges, with four having pleaded guilty [3] Group 3: Context of the Paycheck Protection Program - The Paycheck Protection Program was established in March 2020 to assist Americans financially affected by the pandemic, providing forgivable loans to small businesses [4] - KeyCorp operates approximately 1,000 branches across 15 U.S. states and had assets totaling $187.4 billion as of September 30, 2025 [4]

Core Viewpoint - A unit of KeyCorp will pay $7.77 million to settle allegations of violating the federal False Claims Act by submitting fraudulent loans for forgiveness under the Paycheck Protection Program [1] Group 1 - The settlement amount is $7.77 million, indicating a significant financial impact on KeyCorp [1] - The allegations involve fraudulent activities related to the Paycheck Protection Program, which was designed to provide financial relief during the COVID-19 pandemic [1] - The resolution of these allegations reflects ongoing scrutiny and enforcement actions related to the misuse of federal funds [1]

Core Insights - 2025 was a positive year for regional banks, with higher interest margins contributing to a recovery in earnings and decent stock returns [1] Summary by Category Industry Performance - The regional banking industry experienced a recovery in earnings due to higher interest margins [1] - Stock returns for regional banks were decent, although funds tracking this sector did not outperform the broader market [1] Investment Approach - A long-term, buy-and-hold investment strategy is favored, particularly for stocks that can consistently deliver high-quality earnings [1]

Core Insights - KeyCorp (KEY) has experienced a volatile trend in net interest income (NII), with increases in 2020, 2021, and 2022, followed by declines in 2023 and 2024, but a rebound in the first nine months of 2025 due to lower deposit costs and asset repricing [1][11] Group 1: Net Interest Income Trends - In 2025, KeyCorp's NII is expected to rise by 22% year over year, with fourth-quarter NII projected to grow by 13% or more [5][11] - The net interest margin (NIM) is anticipated to be between 2.75% and 2.8% in the fourth quarter of 2025, with expectations to exceed 3% by the end of 2026 [5][11] - The decline in interest rates has led to a narrowing of the spread between earnings and costs, impacting NII, but lower funding costs and increased loan volumes are expected to support NII growth [2][3] Group 2: Peer Comparison - Fifth Third Bancorp (FITB) has shown a five-year compound annual growth rate (CAGR) of 4.2% in NII, with a 6.2% year-over-year increase in the first nine months of 2025 [7] - U.S. Bancorp (USB) has also demonstrated consistent NII growth, with a five-year CAGR of 4.4% and a 2% increase in NII year over year in the first nine months of 2025 [8] Group 3: Market Performance - KeyCorp's shares have increased by 16% over the past six months, slightly underperforming the industry growth of 17.4% [10]

Group 1 - KeyCorp (NYSE:KEY) has been added to David Tepper's stock portfolio, with a current stake valued at $37.75 million as of Q3 2025 [1][2] - The average price target for KeyCorp suggests a potential upside of 4%, while the highest target indicates an upside of 18% [1] - Truist analyst Brian Foran has maintained a Hold recommendation on KeyCorp, raising the target price from $19 to $22 [2] Group 2 - KeyCorp's CEO Chris Gorman stated that the bank is not pursuing acquisitions and will focus on share repurchases instead [2] - Gorman emphasized that KeyCorp is aligned with the activist investor HoldCo Asset Management's recommendation to avoid bank acquisitions [2] - The bank plans to allocate capital towards buying back its own stock, believing it to be undervalued [2]

Company Overview - KeyCorp has a market capitalization of $22.9 billion and operates as a bank holding company for KeyBank National Association, offering a variety of retail and commercial banking products and services [1] Upcoming Earnings - KeyCorp is set to announce its fiscal Q4 2025 results soon, with analysts predicting an EPS of $0.38, consistent with the same quarter last year [2] - For fiscal 2025, analysts expect an EPS of $1.48, representing a growth of 27.6% from $1.16 in fiscal 2024 [3] Stock Performance - Over the past 52 weeks, KeyCorp's shares have increased by 24.8%, outperforming the S&P 500 Index's gain of 16.5% and the Financial Select Sector SPDR Fund's return of 14.7% [4] Recent Financial Results - KeyCorp reported strong Q3 2025 results, with a 23.8% increase in net interest income to $1.19 billion, attributed to lower deposit costs and a shift towards higher-yielding assets. Revenue rose by 17% to $1.9 billion, and investment banking and debt placement fees increased by 7.6%. However, the stock fell by 5.4% on the announcement day [5] Analyst Ratings - The consensus view on KeyCorp stock is cautiously optimistic, with a "Moderate Buy" rating. Among 23 analysts, 11 recommend a "Strong Buy," 2 suggest a "Moderate Buy," and 10 have "Holds." The average price target for KeyCorp is $21.31, indicating a potential upside of 1.6% from current levels [6]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, capitalizing on established price movements [1] Company Overview: KeyCorp (KEY) - KeyCorp currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4] Performance Metrics - Over the past week, KeyCorp shares have increased by 7.27%, outperforming the Zacks Banks - Major Regional industry, which rose by 4.34% [6] - In a longer timeframe, KeyCorp's shares have appreciated by 21.18% over the past month, compared to the industry's 12.95% [6] - For the last quarter, KeyCorp shares rose by 11.32%, and over the past year, they gained 24.57%, while the S&P 500 only increased by 2.44% and 16.74%, respectively [7] Trading Volume - KeyCorp's average 20-day trading volume is 16,886,354 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the past two months, six earnings estimates for KeyCorp have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.46 to $1.48 [10] - For the next fiscal year, five estimates have also moved higher, indicating positive sentiment regarding future earnings [10] Conclusion - Given the strong performance metrics and positive earnings outlook, KeyCorp is identified as a solid momentum pick with a Momentum Score of A and a Zacks Rank of 2 (Buy) [12]

Core Insights - The year has been marked by volatility in the markets, initially driven by optimism surrounding President Trump's return, followed by market fluctuations due to tariff rollouts [1] - A strong recovery in the markets has been observed, reaching record highs, supported by the Federal Reserve's interest rate cuts, which have lowered rates by 75 basis points this year [2] - Banks are expected to benefit from a favorable operating environment in 2026, with anticipated growth in net interest income (NII) and deal-making activities [4] Banking Sector Overview - The Federal Reserve's interest rate cuts and stabilizing funding costs are setting the stage for a potentially favorable 2026 for banks, with expectations of increased revenues [2][8] - Banks are focusing on artificial intelligence (AI) and technology to enhance client experiences and expand online presence, which is crucial for capturing the growing mobile banking population [3] - Consumer spending remains resilient, and credit demand is showing early signs of recovery, contributing to a positive outlook for bank stocks [4] Investment Opportunities - East West Bancorp (EWBC), U.S. Bancorp (USB), and KeyCorp (KEY) are identified as compelling investment opportunities in the banking sector, with each company having a market cap exceeding $10 billion and expected earnings growth of more than 5% in 2026 [5] - EWBC has a market cap of $15.6 billion, with projected earnings growth of 13.4% this year and 7.4% in 2026, supported by solid loan demand and fee income focus [12] - USB, with a market cap of $83.5 billion, is expected to see earnings growth of 14.1% this year and 7.1% in 2026, bolstered by strategic acquisitions and rising NII [18] - KeyCorp, having a market cap of $22.4 billion, is projected to achieve earnings growth of 27.6% this year and 19.6% in 2026, benefiting from strong loan and deposit balances [23] Company-Specific Insights - East West Bancorp operates over 110 locations in the U.S. and China, with total assets of $79.7 billion and a focus on improving fee income and acquiring low-cost deposits [10][11] - U.S. Bancorp has strengthened its market position through acquisitions and partnerships, enhancing its digital capabilities and fee-based businesses [16][17] - KeyCorp is expanding its product offerings and market share through opportunistic acquisitions and is consolidating its branch network to adapt to rising digital banking demand [22]