Ally Financial stock price target lowered to $42 by BofA on 2026 outlook

Investing.com - BofA Securities has lowered its price target on Ally Financial (NYSE:ALLY) to $42 from $43 while maintaining a Buy rating on the financial services company. The stock, currently trading at $36.96, sits approximately 17% below its 52-week high of $44.83. According to InvestingPro analysis, the stock’s RSI indicates oversold conditions, potentially presenting an opportunity for value investors.

The adjustment comes as BofA analyst Brandon Berman expects Ally to report earnings slightly below consensus estimates of $1.01 per share, though the firm doesn’t anticipate the underlying results will surprise investors. The bank cited expectations for lower fees and higher expenses in its forecast. Despite near-term challenges, InvestingPro data shows Ally has maintained dividend payments for 10 consecutive years, with a current yield of 3.25%.

BofA projects Ally’s net interest margin (NIM) will continue its upward trajectory despite rate cuts, forecasting a 9 basis point quarter-over-quarter increase to 3.54%. The firm’s outlook assumes retail auto yields will increase by 11 basis points quarter-over-quarter while deposit costs will decline by 7 basis points.

The credit environment remained constructive in the third quarter of 2025, with BofA estimating retail auto net charge-offs at 2.08%. Despite this positive credit backdrop, Ally shares have declined 17% from their 52-week high amid broader industry credit concerns.

BofA’s price target reduction reflects downward revisions to its 2026 earnings estimates for Ally Financial, though the firm maintains its Buy rating on the stock.

In other recent news, Ally Financial has declared a quarterly cash dividend of $0.30 per share on its common stock, payable on November 14, 2025, to shareholders of record as of October 31, 2025. Additionally, the company announced dividend payments for two series of preferred stock, amounting to approximately $15.9 million and $11.8 million, respectively. Meanwhile, Wells Fargo has upgraded Ally Financial’s stock rating to Equal Weight, citing a more balanced risk/reward outlook amid expectations of a Federal Reserve rate cut. Evercore ISI has also adjusted its price target for Ally Financial to $45.00, maintaining an "In Line" rating. Truist Securities echoed this sentiment by raising its price target to $45.00 from $44.00 and increasing its 2025 earnings per share estimate from $2.10 to $2.35 following strong second-quarter results.

In corporate developments, Ally Financial announced the retirement of its Chief Accounting Officer and Controller, David J. DeBrunner. Austin T. McGrath, who has been with the company since 2007, will succeed DeBrunner as Chief Accounting Officer and Controller effective August 8, 2025. McGrath has held various roles within the company, most recently as executive director for SEC Reporting, Regulatory Reporting, and Risk Finance. These developments highlight a period of transition and growth for Ally Financial, as it navigates changes in leadership and responds to market conditions.

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