We maintain our 12-month target price at $19, 10.7x our 2026 EPS estimate, a modest discount to KEY's five-year forward P/E average of 10.9x. We keep our 2025 EPS estimate at $1.49 and reduce 2026's by $0.02 to $1.77. KEY is making solid progress in its turnaround, driven by healthy net interest margin expansion and continued efficiency improvements. Reflecting these strong results, the company raised its Q4 2024 net interest margin guidance to 2.75%-2.80% from the prior 2.75%. This improved position has enabled KEY to return to the open market, with plans to repurchase approximately $100 million of common stock in the fourth quarter. External validation came via Fitch's one-notch upgrade to both long and short-term ratings this quarter, elevating senior unsecured debt to A-. Despite these positive developments, we continue to favor other regional banks for superior upside potential, as KEY's loan growth remains relatively weak with limited prospects for meaningful market share gains in the coming years.

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