Truist Securities lowered its price target on KeyCorp (NYSE: KEY) to $22 from $23, while maintaining a Hold rating, despite improving loan growth trends.
The firm noted that KeyCorp has already exceeded its full-year loan growth target of 1% to 2% based on first-quarter performance. In January, total loans increased by $0.6 billion, equivalent to a 7% annualized growth rate, with commercial loans rising nearly $1.0 billion.
Follow-up data for February and broader industry indicators suggested continued strength, leading Truist to estimate total loan growth of approximately $2.0 billion for the first quarter, including $2.7 billion in commercial and industrial loans.
However, the firm questioned the sustainability of this growth, noting that in the prior year, loan expansion was stronger in the first half before slowing in the second half.
Truist raised its 2026 end-of-period loan growth estimate to 5% from 3%, driven largely by first-half momentum.
The firm slightly reduced its 2026 investment banking revenue growth estimate to 5% year over year from 6%, reflecting recent capital market volatility, while maintaining a 3% growth forecast for 2027.
Earnings estimates were revised higher, with 2026 EPS increased to $1.85 from $1.80 and 2027 EPS raised to $2.20 from $2.15.
The updated $22 price target reflects a lower valuation multiple of 10x 2027 earnings, representing a discount to historical averages to account for elevated macroeconomic and geopolitical risks.
