KEY: Mtg. w/Multiple Businsses Heads at our Chicago Conf.

Research evidence excerpt

KEY: Mtg. w/Multiple Businsses Heads at our Chicago Conf.

KeyCorp Equity Research

Investment Thesis, Valuation and Risks

KeyCorp (KEY)

Investment Thesis

KEY (rated Overweight) is "less bad" strategically, as it pursues an approach of "targeted scale" and tries to become less "all things to all

people" under its most recent CEO—the approach seems to have merit. KEY should see continued benefits from run-off of low-yielding

swaps and residential mortgages and reinvest into higher yielding assets throughout 2026 and 2027. In addition, KEY should begin more

robust buybacks in 2026 at a relatively low price-to-book.

Target Price Valuation for KEY

Our price target of $24 is based on historical P/E (11.3x 1-year forward and 10.8x 2-year forward), price-to-book, dividend yield, and peer

analysis (implies 1.5x est. book value and 1.8x est. TBV as of 2027E). We estimate KEY should reach an 12.6% ROCE and 15% ROTCE in

2027, close to the targeted range, and above the longer-term historical average (~10%), which should justify a price-to-book of ~1.4x

based on historical and peer comps.

Risks to Our Price Target and Rating for KEY

Risks include greater-than-expected credit losses and slower loan growth from weaker-than-expected GDP growth, higher deposit costs.

KEY must continue to see good growth in its Laurel Road sub, a national affinity bank for medical professionals. Inflationary pressures could

cause KEY's expense base to grow more quickly even without commensurate revenue growth. Lastly, slower capital markets activity/lower

asset values from potential weaker macro environment could weigh on fee growth.

Companies Mentioned in Report

Company Name Ticker Last Price

(05/13/26)

KeyCorp KEY $20.75

Source: Wells Fargo Securities LLC Estimates, FactSet

Equity Research | 3