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Investing.com - BofA Securities has lowered its price target on Ally Financial (NYSE:ALLY) to $43.00 from $44.00 while maintaining a Buy rating on the stock. Currently trading at $39.88, Ally Financial has shown strong momentum with a 12.6% return year-to-date, according to InvestingPro data.
The price target adjustment follows Ally Financial’s second-quarter 2025 earnings beat and improved credit trends, including a lowered high-end outlook for net charge-offs (NCOs).
Despite the positive earnings results, BofA Securities noted that concerns about the bank’s near-term asset sensitivity overshadowed these improvements, contributing to a 140-basis point relative underperformance on Friday.
The financial institution revised its fiscal year 2025 average earning asset outlook downward, which initially pressured the stock, though BofA Securities believes the pressure on dealer floorplan balances is likely temporary.
Ally Financial’s management indicated during its earnings call that fiscal year 2025 net interest margin (NIM) is expected to be at the higher end of its 3.40%-3.50% range, despite assumptions of three interest rate cuts in the second half of 2025 and one more in 2026.
In other recent news, Ally Financial Inc. reported impressive financial results for the second quarter of 2025. The company achieved earnings per share of $0.99, surpassing the forecasted $0.81 by a significant margin. Revenues also exceeded expectations, reaching $2.1 billion, up from the projected $2.04 billion. This strong performance was driven by growth in consumer auto originations and an expanding digital banking customer base. Despite these positive results, the company’s stock experienced a decline, reflecting broader market uncertainties. Additionally, Ally Financial’s strategic focus on auto originations saw the highest quarterly volume recorded at $11 billion. Analyst firms have noted the company’s robust earnings but remain cautious given the mixed market sentiment. Looking ahead, Ally Financial has maintained its positive outlook, with guidance for a full-year net interest margin set between 3.4% and 3.5%.
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