Wells Fargo's analyst Donald Fandetti has adjusted the price target for Ally Financial (ALLY, Financial), raising it from $32 to $37. Despite this upward revision, the analyst maintains an Underweight rating on the stock. The recent quarter was deemed "solid," but Fandetti suggests that other stocks in the consumer finance sector might offer better value. Investors are advised to consider these perspectives when reviewing their portfolios.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for Ally Financial Inc (ALLY, Financial) is $45.06 with a high estimate of $59.00 and a low estimate of $30.00. The average target implies an upside of 13.00% from the current price of $39.88. More detailed estimate data can be found on the Ally Financial Inc (ALLY) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Ally Financial Inc's (ALLY, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Ally Financial Inc (ALLY, Financial) in one year is $33.45, suggesting a downside of 16.12% from the current price of $39.88. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Ally Financial Inc (ALLY) Summary page.
ALLY Key Business Developments
Release Date: July 18, 2025
- Adjusted Earnings Per Share: $0.99
- Core Pretax Income: $418 million
- Net Interest Margin (excluding core OID): 3.45%
- Core ROTCE: 13.6%
- Consumer Originations in Auto Finance: $11 billion
- Origination Yields: 9.82%
- Insurance Written Premiums: $349 million
- Corporate Finance ROE: 31%
- Digital Bank Customer Count: 3.4 million
- Deposit Balances: $143 billion
- Net Financing Revenue: Approximately $1.5 billion
- Adjusted Other Revenue: $531 million
- Adjusted Provision Expense: $384 million
- Adjusted Noninterest Expense: $1.3 billion
- Effective Tax Rate: 19%
- GAAP Earnings Per Share: $1.04
- CET1 Ratio: 9.9%
- Adjusted Tangible Book Value Per Share: $37
- Consolidated Net Charge-Off Rate: 110 basis points
- Retail Auto Net Charge-Off Rate: 1.75%
- 30-plus Day Delinquencies: 4.88%
- Retail Auto Coverage Rate: 3.75%
- Retail Auto Portfolio Yield (excluding hedges): 9.19%
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ally Financial Inc (ALLY, Financial) delivered adjusted earnings per share of $0.99 and core pretax income of $418 million, marking double-digit year-over-year growth.
- Net interest margin, excluding core OID, expanded by 10 basis points quarter-over-quarter to 3.45%, indicating strong financial performance.
- The company achieved a core ROTCE of 13.6% in the quarter, demonstrating robust return on tangible common equity.
- Ally Financial Inc (ALLY) continues to see strong performance in its Auto Finance business, with consumer originations reaching $11 billion, driven by a record application volume.
- The digital bank segment reported an all-time high of 3.4 million customers, marking 65 consecutive quarters of net customer growth, reinforcing its position as the nation's largest all-digital bank.
Negative Points
- The sale of the credit card business resulted in a 20 basis points drag on net interest margin, impacting overall financial performance.
- Adjusted provision expense was $384 million, reflecting a 23% decrease from the prior quarter, but still indicating a cautious approach due to macroeconomic uncertainty.
- Retail auto net charge-off rate was 1.75%, which, although improved, still reflects elevated delinquency levels.
- Deposit balances decreased by approximately $3 billion quarter-over-quarter, attributed to seasonal tax outflows, which could impact funding stability.
- The insurance business recorded a core pretax loss of $2 million due to higher losses, despite strong growth in premiums and investment revenue.
