KeyCorp (NYSE: KEY) Quarterly Earnings Preview

• Analysts expect earnings per share (EPS) of $0.32 and projected revenue of approximately $1.75 billion for the first quarter of 2025.
• KeyCorp's earnings growth is anticipated to benefit from increases in fee income and net interest income (NII), despite challenges from higher provisions and increased expenses.
• High valuation metrics and a substantial reliance on debt financing are noted, with a price-to-earnings (P/E) ratio of approximately 169.28 and a debt-to-equity ratio of 14.31.

KeyCorp (NYSE: KEY) is a leading financial services company in the United States, known for its comprehensive banking and financial solutions. With its quarterly earnings set to be released on April 17, 2025, the company is under the spotlight as analysts have forecasted an EPS of $0.32 and a revenue estimate of $1.75 billion. This eagerly awaited report will be made public before the market opens, attracting keen interest from both investors and analysts.

The first-quarter earnings for 2025 are expected to see a boost from growth in fee income and net interest income (NII), pivotal components contributing to the company's revenue and profitability. However, KeyCorp faces hurdles in the form of higher provisions for credit losses and increased operational expenses, as pointed out by Zacks Investment Research. These factors are vital for gauging KeyCorp's financial health and efficiency in operations.

Despite the positive outlook on earnings growth, Zacks Investment Research suggests that KeyCorp might not possess the ideal mix of elements for an earnings beat. Investors are encouraged to take note of the company's high valuation metrics, including a P/E ratio of approximately 169.28 and a price-to-sales ratio of about 2.30, indicating a premium on KeyCorp's earnings and sales.

Furthermore, KeyCorp's financials show a significant dependence on debt financing, evidenced by a debt-to-equity ratio of 14.31. Nevertheless, a current ratio of 18.52 portrays a robust liquidity position, enabling the company to amply cover its short-term obligations. This delicate balance between leveraging debt and maintaining liquidity is essential for the company's ongoing financial stability.

The enterprise value to sales ratio of around 4.14 and the enterprise value to operating cash flow ratio of approximately 39.57, along with an earnings yield of about 0.59%, offer insights into KeyCorp's valuation in relation to its sales and cash flow generation. As the earnings release date approaches, these financial indicators will be under close scrutiny by the investment community.