This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

KeyCorp Leads Bank Stocks Higher Following Strong ADP Report

Stocks in this article: KEY USB RF I:BKX

NEW YORK (TheStreet) -- KeyCorp (KEY) of Cleveland led bank stocks higher on Wednesday, with shares rising more than 2% to close at $12.83, as the continued flow of economic data underlined investors' nervousness over the eventual tapering of bond purchases by the Federal Reserve.

The broad indices ended mixed after Automated Data Processing said private employers in the United States added 215,000 jobs during November, which greatly exceeded the consensus estimate of 173,000, among economists surveyed by Thomson Reuters.

Also on Tuesday, the Department of Commerce said U.S. sales of new single-family homes during October increased 25% from a year earlier to an annual pace of 444,000, which was ahead of the consensus estimate of 425,000.

In an effort to hold long-term interest rates down, the Federal Reserve has been making monthly net monthly "QE3" purchases of long-term U.S. treasury bonds and agency mortgage-backed securities of $85 billion a month since September 2012.  This rapid expansion of the Fed's balance sheet can't go on forever, and investors have shown plenty of jitters heading into the last several meetings of the Federal Open Market Committee, which next meets on Dec. 17-18.

The KBW Banking Index (I:BKX) on Wednesday rose 0.4% to 67.13, with all but seven of the 24 index components ending with gains.  In addition to KeyCorp, large regional banks showing strength included BB&T (BBT) of Winston-Salem, N.C., with shares rising 1.6% to $34.83; U.S. Bancorp (USB) of Minneapolis, up 1.4% to $39.05; and Regions Financial (RF) of Birmingham, Ala., which rose 1.3% to close at $9.67.


KeyCorp's shares have returned a whopping 55% this year.  The shares trade for 1.3 times their reported Sept. 30 tangible book value of $9.92, and for 12.6 times the consensus 2014 EPS estimate of $1.02. The consensus 2015 EPS estimate is $1.12.

JPMorgan Chase analyst Steven Alexopoulos in a client note on Nov. 15 said KeyCorp was in its strongest condition in 20 years, and was well positioned to see a significant acceleration in commercial loan growth.

KeyCorp is also among the regional banks rated "outperform," that Credit Suisse analyst Craig Siegenthaler on Tuesday said would see a significant boost in price valuations during 2014.

KEY ChartKEY data by YCharts

Interested in more on KeyCorp? See TheStreet Ratings' report card for this stock.


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs