5 Most Undervalued Bank Stocks To Buy According To Hedge Funds

In this article, we discuss 5 most undervalued bank stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 11 Most Undervalued Bank Stocks To Buy According To Hedge Funds. 

5. KeyCorp (NYSE:KEY)

Number of Hedge Fund Holders: 33

P/E Ratio as of January 20: 7.55

KeyCorp (NYSE:KEY) was founded in 1849 and is headquartered in Cleveland, Ohio. It is the holding company for KeyBank National Association, which provides retail and commercial banking products and services in the United States. KeyCorp (NYSE:KEY) operates in two segments – Consumer Bank and Commercial Bank. It is one of the most undervalued stocks in the banking sector. 

On January 19, KeyCorp (NYSE:KEY) reported a Q4 GAAP EPS of $0.38 and a revenue of $1.89 billion, falling short of Wall Street estimates by $0.16 and $40 million, respectively. The provision for credit losses of $265 million exceeded net charge-offs by $224 million. 

Deutsche Bank analyst Matt O’Connor on January 6 reiterated a Hold rating on KeyCorp (NYSE:KEY) and lowered the firm’s price target on the shares to $20 from $23. The analyst believes new lows seem possible for U.S. bank stocks. He assumes bank stocks will trade below their historical 60%-80% range, noting bank earnings may be peaking. 

According to Insider Monkey’s data, KeyCorp (NYSE:KEY) was part of 33 hedge fund portfolios at the end of September 2022, compared to 37 in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the biggest stakeholder of the company, with 6.30 million shares worth $101 million.