UPDATE: Compass Point Upgrades KeyCorp to Buy

Compass Point is out with its report today on KeyCorp (NYSE: KEY), upgrading KEY to Buy.

In a note to clients, Compass Point writes, "We are upgrading shares of KEY from Neutral to Buy. Trading at .93x TBV and with 10.7% Tier 1 common, we believe the recent sell‐off provides an attractive risk/reward at the current level. Due to our expectation for continued contraction in their loan portfolio through 3Q11, we expect KEY's Tier 1 common ratio will grow to over 11.5% by year‐end. Thus, with the stock trading below TBV and the prospect for continued growth in TBV and excess capital, we believe shares have sufficient downside protection."

Compass Point maintains a $10 PT on KEY.

At the time of posting, shares of KEY were trading at $8.09, up 2.02% from Monday's close.