On Thursday, Citi expressed a continued positive stance on KeyCorp (NYSE:KEY) stock, maintaining a Buy rating and a $19.00 price target for the financial services company's shares. The endorsement comes as the firm updates its financial model in preparation for KeyCorp's third-quarter earnings report.
Citi has revised its Net Interest Income (NII) projections for KeyCorp for the years 2025 and 2026. These adjustments are based on new assumptions regarding the company's securities repositioning and expectations for swaps. The new estimates align with management's comments, suggesting a year-over-year increase of 20% in 2025. However, due to anticipated maturities of Federal Home Loan Bank (FHLB) advances and a conservative outlook on the trajectory of deposit betas as they decline, Citi's figures remain slightly below the consensus.
The bank's earnings per share (EPS) estimate for 2024 remains unchanged at $0.35, which contrasts with a higher FactSet consensus of $1.09. Looking ahead, Citi has increased its EPS forecast for 2025 by $0.05 to $1.55, compared to a consensus of $1.57. Similarly, the EPS projection for 2026 has been raised by $0.05 to $1.85, which is slightly above the FactSet consensus of $1.82.
Citi's unchanged price target of $19.00 reflects the firm's confidence in KeyCorp's stock value. The financial institution's upcoming earnings report will provide further insights into its performance and may influence future analyses and investor sentiment.
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