KeyCorp (KEY) recently announced that its banking subsidiary, KeyBank, has acquired a B2B digital platform, XUP Payments. The financial terms of the deal have been kept under wraps.
Following the news, shares of the company appreciated 1.58% to close at $23.74 in the extended trade.
Implications of the Deal
The acquisition will allow KeyBank to take advantage of XUP’s efficient technology, which enables simple and intuitive client onboarding. This will allow KeyBank to consequently offer a more seamless experience to its customers and further enhance its own embedded banking strategy.
Management Commentary
The Head of Enterprise Payments & Analytics for KeyBank, Ken Gavrity, said, “We’ve long embraced the software innovation that’s sweeping through the financial services industry, and the acquisition of XUP allows us to continue to be a leader in this space. XUP’s highly experienced team has accelerated us on the journey to build connectivity across our systems, our partners, and our customers, to make it easy to do business with Key.”
Price Target
Recently, RBC Capital analyst Gerard Cassidy reiterated a Buy rating on the stock with a price target of $29, which implies upside potential of 22.7% from current levels.
Consensus among analysts is a Hold based on 4 Buys, 4 Holds and 2 Sells. The average KeyCorp price target of $25.40 implies upside potential of 7.5% from current levels. Shares have gained 50.9% over the past year.
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