BofA Securities double upgraded this regional bank to ‘buy’
Shares of KeyCorp (NYSE: KEY) are up more than 40% this year, but BofA Securities says the stock will rally further in the coming months.
Ebrahim Poonawala sees upside to $27 a share
KEY received a double upgrade from BofA Securities’ Ebrahim Poonawala on Wednesday, who now rates the stock at “buy”. The analyst also raised his price target on KeyCorp to $27 that represents another 17% upside from here.
Strong execution, focus on digital, and significant growth potential were among the reasons why Poonawala is bullish on the stock. In a note this morning, he wrote:
KeyCorp has promising prospects in terms of loan growth due to focus on seven specific industry verticals, among which healthcare, affordable housing, and renewables offer significant runway for client acquisitions and ability to generate superior fee revenue/loan growth.
He’s also confident that higher interest rates will serve as another catalyst for KEY in 2022. Late last month, KeyCorp bought software developer XUP to streamline its commercial payments business.
Degus Wright agrees with the bullish call
On CNBC’s “Halftime Report”, Decatur Capital Management’s Degus Wright, who owns the stock, agreed with the bullish call and said:
What KeyCorp has been able to do through its acquisition strategy is to grow their loan and deposits exceptionally well. Also, it has a 3.4% dividend yield. A lot of the regional banks have strong dividend yields. So, we like regional banks as they’re more nimble than the larger banks.
A few of the other notable regional banks he owns include Huntington Bancshares, Peoples’ United Financial, and Citizens Financial Group. Bank stocks are particularly in the limelight today after the U.S. Federal Reserve signalled three rate hikes next year.
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