Shares of KeyCorp. (KEY) crafted a new 52-week high, touching $13.10 at the end of the trading session on Nov 11. However, the stock closed the session at $12.96, which reflects a solid year-to-date return of 33.1%.The trading volume for the session was 7.8 million shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its strong estimate revisions over the last 30 days and expected long-term earnings growth of 7.7%.
Growth Drivers
Impressive third-quarter 2013 results comprising a positive earnings surprise of 13.64% and growth in net interest income, together with a strong capital position were the key driving factors for KeyCorp.
On Oct 16, KeyCorp reported third-quarter 2013 earnings of 25 cents per share (after considering costs related to the ‘Fit for Growth’ efficiency initiative), outpacing the Zacks Consensus Estimate as well as prior-year quarter figure of 22 cents.
A year-over-year increase of 1.0% in net-interest income as well as rise in deposits and loans were the tailwinds for the quarter. Moreover, the company’s capital ratios depict its strong position. However, an 11.4% fall in non-interest income and a marginal rise in expenses were the headwinds.
Further, KeyCorp has now delivered positive earnings surprises in 3 out of the last 4 quarters with an average beat of 4.77%.
Estimate Revisions Show Potency
Over the last 30 days, 13 out of 15 estimates for 2013 have been revised upward, lifting the Zacks Consensus Estimate by 3.3% to 93 cents per share. For 2014, 10 out of 21 estimates moved north, helping the Zacks Consensus Estimate advance 2.0% to $1.02 per share.
Other better performing banks include SVB Financial Group (SIVB) with a Zacks Rank #1 (Strong Buy), while BankUnited, Inc. (BKU) and Comerica Incorporated (CMA) have a Zacks Rank #2.
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