Recent meetings with KeyCorp’s (NYSE:KEY) CEO Chris Gorman and CFO Don Kimble highlighted the company’s significant and differentiated growth potential, according to BofA Securities.
The KeyCorp Analyst: Ebrahim Poonawala upgraded the rating for KeyCorp from Underperform to Buy, while raising the price target from $25 to $27.
The KeyCorp Thesis: The company has improved loan growth prospects due to its focus on “seven specific industry verticals, among which healthcare, affordable housing and renewables offer significant runway for client acquisitions and ability to generate superior fee revenue/loan growth,” Poonawala said in the upgrade note.
The analyst mentioned the second reason as the market underappreciating KeyCorp’s focus on positioning itself to become “a potential winner as the industry adapts to accelerated digital adoption among its clients.”
Strong execution was the third reason cited by Poonawala.
“Mgmt’s focus on delivering positive operating leverage should drive an improved ROE helped by efficiencies achieved by the continued branch optimization and the boost from higher interest rates,” he added.
KEY Price Action: Shares of KeyCorp had risen by 0.92% to $22.97 at the time of publication Wednesday.
