KeyCorp (KEY) Stock Forecast & Price Target

KeyCorp's financial performance demonstrates a solid upward trajectory, with net interest income for Q3 2025 increasing by 3.7% quarter-over-quarter to $1.193 billion, supported by a notable 9 basis point rise in net interest margin. The bank's investment banking revenues rose approximately 19% year-to-date, reaching $353 million, driven by robust debt and equity capital market activities despite moderate M&A volumes. Furthermore, KeyCorp's tangible common equity (TCE) ratio improved to 8.06%, alongside an increase in the common equity tier 1 (CET1) ratio to 10.3%, indicating enhanced capital strength and positioning for future growth.

KeyCorp's financial outlook reveals a concerning trend, as consumer lending has decreased significantly by $584 million, coupled with declines in commercial real estate and lease financing, which raises concerns about the bank's revenue streams. Furthermore, despite strong capital levels, the forecast for total revenue has been slightly reduced to $7.933 billion, reflecting diminished loan growth expectations and declining fee income projections. The potential risks posed by a projected recession in 2026 could exacerbate issues like lower earnings and increased credit losses, contributing to a negative long-term outlook for the stock.