KeyCorp Stock Buy Recommendation Reiterated (KEY)

NEW YORK ( TheStreet) -- KeyCorp (NYSE: KEY) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins, attractive valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 45.40% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KEY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for KEYCORP is currently very high, coming in at 87.27%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, KEY's net profit margin of 18.68% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.7%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • KEYCORP has improved earnings per share by 5.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KEYCORP reported lower earnings of $0.87 versus $0.92 in the prior year. This year, the market expects earnings to be in line with last year ($0.87 versus $0.87).

KeyCorp. operates as the holding company for KeyBank National Association that provides various banking services in the United States. KeyCorp has a market cap of $10.2 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 12.00, below the S&P 500 P/E ratio of 18.00. Shares are up 33.5% year to date as of the close of trading on Monday.

You can view the full KeyCorp Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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