KeyCorp’s Earnings Trend Lags Despite Recent Book-Value Growth

KeyCorp returned 3.9% since March, trailing the S&P 500’s 21.1% gain over the same period, according to StockStory. The publisher says the bank’s recent book-value growth is a positive, but its earnings trends raise concerns.

As of 13:51 UTC on Sept. 30, KeyCorp shares traded at $20.26, up 0.7% since the previous close. StockStory’s article cited a price of $20.16 and a forward price-to-book ratio of 1.2 times.

StockStory reported that KeyCorp’s net interest income grew at an annualized 3.8% over five years, below the broader banking industry. The publisher said growth came from increases in both outstanding loans and net interest margin, the amount a bank earns relative to its loan book.

The article also said earnings per share fell 5.9% annually over five years, even as revenue grew 2.1%. StockStory interpreted that gap as a sign that the company became less profitable per share as it expanded.

Tangible book value per share was flat over five years, the publisher said, but grew at a 16.1% annual pace over the past two years, from $10.07 to $13.57. StockStory described the valuation as reasonable but said it viewed the company’s fundamentals as a risk.