KeyCorp redemption plan puts preferred structure in focus

KeyCorp (KEY) recently disclosed plans to redeem all 525,000 depositary shares of its Series D preferred stock on September 15, 2026, a capital move that directly concerns both existing preferred and common shareholders.

The redemption price will include the stated liquidation preference plus any accumulated and unpaid dividends and distributions through the effective date. Investors in KeyCorp stock now have a clearer timeline for when these preferred securities are expected to be retired.

KeyCorp’s share price has risen 10.79% over the past 90 days and 11.11% year to date to US$23.31, while the 1 year total shareholder return of 34.68% points to building momentum over a longer horizon.

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With KeyCorp preparing to retire its Series D preferred stock and the common shares at US$23.31 after a strong 1 year run, the key question is whether it makes more sense to buy now or wait for a potentially better entry ahead of the valuation work that follows.

Most Popular Narrative: 10.4% Undervalued

On the most followed narrative, KeyCorp’s fair value of $26.02 sits above the last close at $23.31, which frames the current discussion around upside versus risk.

The analysts have a consensus price target of $26.02 for KeyCorp based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $43.0, and the most bearish reporting a price target of just $22.0.

Read the complete narrative. Read the complete narrative.

The key storyline behind that $26.02 fair value hinges on how fast revenue and earnings build, and what profit margins and future earnings multiple investors are willing to accept. The narrative leans on detailed forecasts for both the top and bottom line. It also makes an explicit call on the return investors might require through the chosen discount rate.

Result: Fair Value of $26.02 (UNDERVALUED)

However, there are still real watchpoints for KeyCorp, including pressure from higher funding costs and any further deterioration in nonperforming loans that could unsettle this narrative.

Next Steps

If the mix of concerns and optimism around KeyCorp feels finely balanced, now is the time to review the evidence and decide where you stand. To see both sides laid out in one place, start with the 4 key rewards and 1 important warning sign

Looking for more investment ideas beyond KeyCorp?

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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.