I’ve been bullish on KeyCorp (KEY) since my first Seeking Alpha article on the stock back about three years, and the shares have finally started outperforming of late. While my prior thesis on KeyCorp was more that the bank wasn’t as bad as commonly perceived, following the bank for a while and seeing what management has been doing over the last year or two, I’m increasingly thinking there’s a standalone positive story to tell – not an “it’s better than people think”, but increasingly “it’s actually pretty good”.
It’s true that KeyCorp isn’t going to be an ROE or ROTCE superstar, but I think the Street has started waking up to not only stronger near-term loan growth potential, but also a fundamentally stronger long-term growth position. KeyCorp’s Western markets are some of the fastest-growing regions in the country, and management is building some strong lending verticals that have long growth runways.
The 30% or so move since my last article has definitely mopped up some of the undervaluation I saw before, but I think I can still argue for a share price 10% higher than today’s price. I’d ideally like a chance to buy in below $25, but I think there’s a buy-and-hold argument at today’s price.
Read the full article here:
KeyCorp: A 'Show Me' Story That Has Been Showing More And More
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