KeyCorp's revenue growth faces headwinds, with analysts projecting a more cautious stance on loan growth amid macroeconomic uncertainties. While interest income remains a significant revenue driver, non-loan businesses like trust and corporate services show promise, potentially reaching $9.1 billion by 2030. The company's Q2 2025 results revealed a 21% YoY revenue increase, but net interest income growth is expected to slow down in the future.

KeyCorp is strategically investing in talent and technology to support future growth. The company aims to increase frontline bankers and client advisors by 10% in 2025. However, the sustainability of growth remains a concern, with analysts probing the company's ability to maintain momentum. The management's tone has shifted from cautious optimism to increased confidence, but macroeconomic uncertainties persist.

KeyCorp's stock performance has been volatile, with periods of strong gains followed by pullbacks. Citi downgraded KeyCorp to Neutral, citing full valuation after a post-earnings bump. The stock's implied cost of equity is in line with Citi's normalized assumption, suggesting limited upside potential. However, UBS upgraded KeyCorp to Buy, citing its superior capital arsenal and strong loan growth momentum.

KeyCorp faces several risks, including macroeconomic uncertainties, potential shifts in loan demand, and credit quality concerns in sectors such as office, multifamily, and lodging. The company is also monitoring competitive deposit pricing and potential market volatility. Gorman highlighted watch points including leveraged companies and sectors dependent on Medicare funding.

KeyCorp is making incremental investments in technology and talent, noting, "We are on track to increase our frontline bankers and client advisers by roughly 10% this year." The company is also investing in AI implementation, which has expanded the roles of chief technology officers, prompting compensation hikes across an array of sectors from consumer to financial services to healthcare.

KeyCorp operates in a highly competitive regional banking market, facing competition from larger peers and non-bank financial institutions. The company's ability to differentiate itself through superior service and innovative products will be crucial for maintaining its market position.

KeyCorp's performance is highly sensitive to macroeconomic factors, including interest rates, inflation, and economic growth. The company's management acknowledged macroeconomic uncertainties, including inflation and geopolitical risks, which could impact client activity and market conditions. The potential impact of tariffs and their second-order effects on client portfolios also pose a risk.

The U.S. regional banking market is large and competitive, with a handful of policy and macroeconomic catalysts that could change the landscape, according to Bank of America Securities. KeyCorp is one of the regional banks that offer a particularly attractive risk-reward profile, according to Bank of America Securities.

KeyCorp faces minimal geopolitical and ownership risks. The company has strong governance and low risks. Scotiabank's minority investment in KeyCorp has enhanced the company's capital and earnings trajectories.