KeyCorp (KEY) Stock Forecast & Price Target

KeyCorp, with assets around $185 billion, has demonstrated solid financial performance in the third quarter of 2025, evidenced by a 3.7% increase in net interest income, reaching $1.193 billion, and a net interest margin improvement of 9 basis points to 2.75%. The bank's investment banking revenues have surged by approximately 19% year-to-date, totaling $353 million, supported by a robust increase in investment banking and debt placement fees. Furthermore, KeyCorp's strong capital position is showcased by a 25 basis point rise in the tangible common equity (TCE) ratio to 8.06% and a Common Equity Tier 1 (CET1) ratio of 10.3%, indicating financial stability and growth potential.

KeyCorp reported a significant decrease in key lending segments, particularly in Consumer, Commercial Real Estate (CRE), and lease financing, which collectively totaled a decline of over $1 billion, raising concerns about demand for loans. Despite maintaining strong capital levels with a Common Equity Tier 1 (CET1) ratio of 11.7%, the company has reduced its revenue and loan growth forecasts for 2026, indicating potential challenges ahead. Additionally, there are concerns regarding a downside scenario involving a recession, which could lead to lower earnings, increased credit losses, and a slowdown in loan growth.