Is KeyCorp overvalued or undervalued?

As of 3 July 2025, the valuation grade for KeyCorp has moved from very attractive to very expensive, indicating a significant shift in its market perception. The company appears overvalued, particularly when considering its P/E ratio of 926, which is starkly higher than its peers such as Huntington Bancshares at 12.37 and Regions Financial Corp. at 12.07. Additionally, KeyCorp's price-to-book value stands at 1.17, while its EV to Capital Employed is 1.23, both of which suggest a premium valuation compared to the industry norms.
In terms of performance, KeyCorp has underperformed against the S&P 500 over the longer term, with a 3-year return of 8.08% compared to the S&P's 70.41%, and a 5-year return of 51.23% against the S&P's 96.61%. This trend reinforces the notion that the stock may not justify its current valuation levels, especially given the stark contrast in returns and the high valuation ratios.