KEY - KeyCorp Is Focused On The Right Details And Undervalued Going Into 2021
- KeyCorp delivered both better than expected credit costs in the fourth quarter and also a core pre-provision beat, as better spread income and much better fee income outweighed higher costs.
- Management's guidance for 2021 sounded comparatively conservative on loan growth and spread income, but the improved charge-off guidance was welcome.
- Guidance for positive operating leverage, including a year-over-year decline in opex, seems ambitious relative to Key's own history and guidance from other banks.
- KeyCorp looks undervalued on the basis of long-term mid-single-digit core earnings growth, as well as ROTCE, and greater confidence in positive operating leverage could be a catalyst in '21.
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KeyCorp Is Focused On The Right Details And Undervalued Going Into 2021