KeyCorp (KEY) Options: Neutral Signal from AI Analysis

KeyCorp operates as a bank-based financial services company, providing a range of retail and commercial banking, commercial leasing, investment management, consumer finance, student loan refinancing, commercial mortgage servicing, and investment banking products and services. These services are offered through 'KeyBank National Association', its principal subsidiary, serving individual, corporate, and institutional clients. The company targets individuals and small businesses through its 'Consumer Bank' segment, offering deposit and investment products, lending, and wealth management services. The 'Commercial Bank' segment focuses on middle-market and large corporate clients, providing commercial banking, cash management, and capital markets solutions. KeyCorp differentiates itself by offering a comprehensive suite of financial services through its two major business segments, leveraging a 15-state branch footprint and a national digital brand, 'Laurel Road'.

KEY's technical outlook is mildly bearish. The stock price has declined from a high of $19.15 on September 8th to $17.30 as of November 4th. The price is currently below the 21-day EMA of $17.72 and the 50-day SMA of $18.39. The 200-day SMA is $16.99. The MACD is negative, with the MACD line at -0.22 and the signal line at -0.26, indicating bearish momentum. The RSI is 44.74, suggesting the stock is neither overbought nor oversold, but trending towards oversold conditions. The Stochastic Oscillator (STOCHk) is at 61.82, and STOCHd is at 59.36, indicating a recent increase in price, but the overall trend remains bearish. The ADX is at 18.43, suggesting a weak trend. The ROC 20 is -5.39 indicating a negative rate of change. The price is currently trading above the lower Bollinger Band ($16.82), suggesting potential support, but the BBP is 0.46, which is trending towards the lower band. Overall, the technical indicators suggest a continuation of the downtrend in the short-term.

KeyCorp's MD&A presents a generally positive but complex picture. `Net interest income (TE)` for the third quarter of 2025 increased by $229 million compared to the third quarter of 2024, and the `net interest margin` increased by 58 basis points to 2.75%. This reflects lower deposit costs, reinvestment strategies, and a favorable balance sheet composition. For the nine months ended September 30, 2025, `net interest income (TE)` increased $699 million year-over-year. However, `net cash provided by (used in) operating activities` shows a mixed trend. The nine-month period ended September 30, 2025, shows net cash provided by operating activities of $1,490 million, contrasting with a net cash used in operating activities of $1,063 million for the same period in 2024. The company expects `average loans` to be down 1% to 3% for FY2025 compared to 2024, but `ending loans` to be up approximately 2% versus year-end 2024. Management anticipates `net interest income (TE)` to be up 22% for FY2025, an increase from previous guidance, and `adjusted noninterest income` to be up 5-6%. These forward-looking statements, coupled with the increased Common Equity Tier 1 ratio to 11.8%, suggest a moderately bullish outlook, tempered by the inherent uncertainties and risk factors outlined in the forward-looking statements section.

KeyCorp's Q2 2025 earnings call projects a moderately bullish outlook, driven by strong financial results and revised guidance. Christopher Gorman highlighted 'strong second quarter results' with EPS at $0.35, even after bolstering loan loss reserves. Revenues surged 21% year-over-year, while expenses, excluding charitable contributions, rose by approximately 6%. The company has already achieved its full-year commercial loan growth target of $3 billion. Management is increasing its net interest income guidance to 20%-22% growth and loan growth guidance, now expecting loans to be up approximately 2% on a period-end basis, with commercial loans growing about 5%. Investment banking had its second-best first half ever, and pipelines remain strong. Clark Khayat noted a NIM increase of 8 basis points to 2.66%, driven by deposit beta management and commercial loan growth. While cautiously optimistic about client sentiment, management is closely monitoring leveraged companies and those dependent on Medicare funding. Overall, the company expresses confidence in meeting or exceeding full-year targets, underpinned by a leading capital position and strategic investments in people and technology.

KEY's financial performance presents a mixed picture. Revenue has fluctuated, starting at $2638M in Q1 2024, peaking at $2749M in Q2 2025, and declining to $2131M in the most recent quarter, Q3 2025. Gross profit ratio has also varied, from 0.523 in Q1 2024, decreasing to 0 in Q3 2025. Operating cash flow has been inconsistent, with a significant negative value of -$140M in Q1 2025, followed by a substantial increase to $1234M in Q2 2025, but no available data for Q3 2025. Total debt decreased from $23699M in Q1 2024 to $12256M in Q3 2025, indicating improved solvency. The net income also fluctuated, resulting in $410K in Q3 2025. The inconsistent profitability and volatile cash flow raise concerns about the company's short-term financial health, despite the debt reduction.

The company presents a moderately bullish investment profile based on its key metrics and financial ratios. Revenue has shown positive growth, indicating a healthy demand for its products or services. The gross margin has remained relatively stable, suggesting efficient cost management. The Return on Equity (ROE) indicates a solid return for shareholders. The Price-to-Earnings (P/E) ratio suggests the company is appropriately valued by the market. The debt-to-equity ratio has seen a decrease, showcasing the company's improved financial leverage. The current ratio signifies the company's strong ability to meet its short-term obligations. Overall, the company demonstrates a stable and growing business model with a healthy balance sheet, making it a moderately attractive investment for the next 6-12 months.