KeyCorp KEY
Verdict: Sell. Fair value $21.77 against a price of $21.37 on 6 Jan 2026, 2% above the price.
In plain words
The case for: Narrow competitive moat provides durability.
The case against: Competitive moat at risk of erosion. Intense competitive pressure could compress margins. Net Income has collapsed from a $2.62B profit in 2021 to a -$0.16B loss in 2024. Similarly, Revenue....
Main risks
- Collapsing Profitability: Net income has deteriorated from $2.62B in 2021 to a loss of $0.16B in the most recent annual period, with ROE falling to a very weak 5.3% in the last full year.
- Negative Incremental Returns on Capital: The estimated 3-year ROIIC is -2.8%, indicating that capital invested over the past three years has been value-destructive, a severe red flag for capital allocation effectiveness.
- Significant Revenue Decline: Revenue has fallen from over $7B in 2021 to a TTM figure of $6.14B, a clear sign of pressure on the core business, likely from net interest margin compression or market share loss.
- Net Income has collapsed from a $2.62B profit in 2021 to a -$0.16B loss in 2024. Similarly, Revenue...
- Operating Cash Flow has plummeted by 85% over two years, from $4.47B in 2022 to just $0.66B in...
- Intense competitive environment