Zacks Investment Research upgraded shares of KeyCorp (KEY) from NEUTRAL to OUTPERFORM on October 04, 2012, with a target price of $10.00.
We are upgrading our recommendation on KeyCorp to Outperform based on its recent announcement of cost cutting initiatives. Moreover, the company's second quarter 2012 earnings surpassed the Zacks Consensus Estimate by a nickel. Better-than-expected results were aided by stable non-interest income, continued improvement in credit quality and robust capital ratios. However, these positives were partly offset by lower net interest income and rising operating expenses. We expect the company's business restructuring actions to continue to fuel its credit quality and liquidity. Though the approval for the company's capital plan highlights its sound capital position, we remain wary of the persisting slow economic recovery, stringent regulatory restrictions and the low interest rate scenario. Nevertheless, we are optimistic on the company's strong balance sheet and improved market share.
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