On Thursday, RBC Capital Markets adjusted its outlook on Ally Financial (NYSE: NYSE:ALLY), increasing the firm's price target to $49 from $46 while maintaining an Outperform rating. This adjustment reflects a positive assessment of Ally Financial's second-quarter earnings, which were bolstered by improved margins, consistent balance sheet performance, and seasonally reduced losses.
The company's recent earnings recap highlighted several key factors contributing to its robust financial performance. Margin improvements played a significant role, as did stable trends in the company's balance sheet. Additionally, Ally Financial experienced lower-than-expected losses for the season, which further strengthened its financial standing.
Management at Ally Financial expressed confidence in the company's prospects, indicating the anticipation of continued margin expansion in the upcoming quarters. This expansion is expected to be the main catalyst for higher projected earnings and returns for the company.
Credit expectations are also pivotal to the financial institution's outlook. RBC Capital Markets noted an improved origination mix, which is seen as a positive indicator for Ally Financial's performance later in 2024 and beyond. This aspect of the business is expected to contribute to the company's ongoing success and support the rationale behind the raised price target.
In other recent news, Ally Financial has seen a flurry of activity from analyst firms. Notably, Jefferies increased the company's share price target from $36 to $40, following an upward revision of the second quarter 2024 diluted adjusted earnings per share (EPS) forecast.
This was based on the company's management guidance, which anticipates higher Net Interest Margin and Other Revenue for the full-year 2024. The firm also revised its full-year 2024 and 2025 EPS forecasts for Ally Financial, raising them to $3.09 and $5.65, respectively.
JPMorgan (NYSE:JPM) revised its rating for Ally Financial's stock from Underweight to Neutral, acknowledging improved performance metrics and potential for improved risk-adjusted margins. The firm also increased the stock's price target to $45.00, reflecting an updated assessment of the company's financial prospects.
BTIG maintained its Buy rating on Ally Financial, citing potential for upside in the company's future earnings. The firm set a $51.00 price target for the company's shares, based on their projections for a significantly higher EPS than the market average by 2026.
Citi initiated coverage on Ally Financial with a Buy rating, setting a price target of $50.00. The firm believes that Ally Financial is well-positioned to navigate a potential "soft landing" economic scenario.
These recent developments come amid Ally Financial's stronger-than-anticipated first-quarter revenue of $2 billion and successful navigation of the Federal Reserve's annual stress test.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.