KeyCorp (KEY) Could Be 10% Undervalued After Stronger Q2 Earnings

KeyCorp (KEY) has drawn fresh attention after reporting second quarter 2026 results, with higher net interest income and net income alongside an increase in net loan charge offs compared with a year earlier.

See our latest analysis for KeyCorp.

At a share price of US$22.59, KeyCorp has seen a modest 90 day share price return of 3.29%, while the 1 year total shareholder return of 33.40% points to stronger longer term momentum, even as higher net loan charge offs temper sentiment around recent earnings.

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KeyCorp now trades at a discount to both analyst targets and one estimate of intrinsic value, even after its recent rebound. Is that a simple case of the market being too cautious about rising charge offs, or a fair warning sign investors should respect?

Most Popular Narrative: 10.4% Undervalued

At $22.59, the most followed narrative on KeyCorp pegs fair value higher at $25.22. The gap comes down to how you view its earnings power over time.

The anticipated shift from net interest income (NII) headwinds to tailwinds due to a pivot in fixed asset repricing and the structure of swap and treasury maturities, expected to significantly enhance NII in the forthcoming quarters, impacting revenue growth positively.

Read the complete narrative.

Want to see what sits behind that NII inflection call for KeyCorp? The narrative leans on a detailed path for revenue, margins and future earnings multiples. The full set of assumptions shows how those moving parts add up to the $25.22 fair value estimate.

Result: Fair Value of $25.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, KeyCorp still faces meaningful risks if credit quality weakens further or if higher funding costs squeeze net interest income more than analysts currently factor in.

Find out about the key risks to this KeyCorp narrative.

Next Steps

With both risks and rewards in focus for KeyCorp, this is a moment to move quickly, review the figures yourself, and shape your own view with the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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