KeyCorp (KEY) Stock Forecast & Price Target

KeyCorp is positioned favorably because the 2024 bond portfolio restructuring and ongoing balance-sheet repositioning are supporting stronger net interest income, with 3Q26 NII rising 9.6% year over year to $1.31 billion and NIM expanding to 2.95%. Its focused middle-market commercial franchise across seven industry verticals is driving loan growth, including 13.9% year-over-year C&I growth to $64.42 billion, while deposit growth and lower deposit costs provide further margin support. Credit quality and capital are also solid, with NCOs at 32 bps, NPAs at 0.62%, CET1 at 11.1%, and buyback flexibility enhancing earnings resilience and shareholder returns.

KeyCorp is facing deteriorating fundamentals, as tangible book value per share fell 9.3% sequentially to $12.35 and 7.7% year over year to $13.38, while book value per share also declined to $15.01. Credit quality and earnings are under pressure, with provision for credit losses rising to $55.0 million from $26.0 million in the prior quarter and average loans dropping to $32.60 billion, including continued runoff across all consumer loan categories. The Other segment’s net loss widened to $148.0 million, and macro risks tied to persistent inflation, policy uncertainty, and Middle East hostilities could further weaken loan growth, credit quality, and profitability.