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KeyBank - AI Stock Analysis

Analysis generated April 9, 2024

KeyBank, formally known as KeyCorp, is one of the largest bank-based financial services companies in the United States. Offering a variety of banking and financial products to both retail and commercial customers, KeyBank operates through a vast network of branches and ATMs, alongside its online and mobile banking platforms. As a regional bank, KeyBank has a significant presence in the Northeastern, Midwestern, and Pacific Northwest regions of the U.S., providing a range of services from traditional deposit and lending offerings to investment and asset management.

Fundamental Analysis

KeyBank's financial performance in the last quarter raises multiple concerns. The reported revenue of $1.54B, representing a 1.79% decrease from the previous quarter and a more alarming 18.97% drop from the same quarter last year, signals potential difficulties in maintaining sales and income levels. Similarly, the net income plummeted by 78.55% QoQ and suffered an 83.50% YoY decline, settling at a mere $65M. These numbers could indicate challenges in the bank's profitability, efficiency, or market conditions it operates within. Despite these troubling income figures, there is some solace in the Ebitda of $1.24B which shows a 23.09% increase over the same quarter from the previous year. Such a contrast suggests that while income is decreasing, the company might be controlling costs effectively or benefitting from non-operational revenue. Considering the valuation metric, the P/E ratio stands at 17.11, which does not suggest an overvaluation or undervaluation in isolation but needs to be compared against industry benchmarks and historical P/E ratios for KeyBank. The insider selling activity in recent months may be a red flag for potential investors, as it could signify that those with the most insight into the company believe the stock price may not go much higher.

Technical Analysis

The bullish trend, as indicated by the Simple Moving Average (SMA10) rising to 15.36 from 15.33, shows a slight upward trajectory in stock prices. Nonetheless, this minimal change invites caution for relying solely on this metric for a bullish forecast. The Relative Strength Index (RSI) at 39.7 suggests neither overbought nor oversold conditions, supporting a neutral stance from a technical perspective. Investors looking for significant indicators of momentum may not find convincing evidence either way from the current technical data.

Alternative Data Analysis

From an alternative data standpoint, KeyBank exhibits growth potential. The increase in job postings by 6% and webpage visitors by 12% in the past couple of months are positive signals of expansion and heightened customer interest, respectively. On the social media front, traction appears to be stagnant, evidenced by a lack of substantial growth or decline in the number of followers on Instagram and Twitter. The mobile app downloads remaining constant could imply that there is no significant shift in customer onboarding or engagement through digital platforms.

Conclusion and Recommendation

After assessing the fundamental, technical, and alternative data provided, KeyBank presents a mixed investment proposition. On the one hand, the decrease in revenue and net income is concerning and suggests a potentially deeper issue at the company or within the banking sector as a whole. On the other hand, positive Ebitda growth, steady app engagements, and an increasing online presence provide some optimistic outlooks. For conservative investors, these warning signs, coupled with insider sales, might warrant a 'hold' or 'sell' recommendation until clearer positive signals emerge. For more aggressive investors, the growth factors in alternative data and a non-extreme P/E could be a 'buy' signal, betting on the bank's future expansion and operational adjustments to improve profitability. In conclusion, the decision to invest in KeyBank should be aligned with one's risk tolerance and investment strategy, while closely monitoring upcoming quarterly reports and market conditions shaping the financial sector.