Rating Change #3
Keycorp (KEY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- KEYCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, KEYCORP turned its bottom line around by earning $0.47 versus -$2.51 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.47).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 242.8% when compared to the same quarter one year prior, rising from $70.00 million to $240.00 million.
- Net operating cash flow has increased to $1,042.00 million or 46.76% when compared to the same quarter last year. Despite an increase in cash flow, KEYCORP's average is still marginally south of the industry average growth rate of 46.96%.
- The revenue fell significantly faster than the industry average of 20.1%. Since the same quarter one year prior, revenues fell by 12.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- KEY has underperformed the S&P 500 Index, declining 23.21% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
KeyCorp operates as a holding company for KeyBank National Association that provides various banking services in the United States. The company has a P/E ratio of 6.7, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. KeyCorp has a market cap of $6.2 billion and is part of the financial sector and banking industry. Shares are down 28.6% year to date as of the close of trading on Tuesday.You can view the full KeyCorp Ratings Report or get investment ideas from our investment research center.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV