KEY
KeyCorp
$22.53
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.4% below fair value
You pay
$22.53
Bear
$17.23
Fair
$24.60
Bull
$31.99
Bear
$17.23
-23.5%
ROTCE 7.8% → 0.64x TBV
Fair
$24.60
+9.2%
ROTCE 10.4% → 1.08x TBV
Bull
$31.99
+42.0%
ROTCE 11.9% → 1.34x TBV
Key Value Driver
ROTCE (10.4%) vs. cost of equity (9.9%)
Implied Market Multiple
1.38x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $25.44 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $24.60 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $9.28 (62% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly