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On Tuesday, Morgan Stanley (NYSE:MS) analysts reaffirmed their Overweight rating on Ally Financial (NYSE:ALLY) stock, maintaining a price target of $39.00. Currently trading at $35.24, Ally has a market capitalization of $10.82 billion and trades at a P/E ratio of 56.79. The analysts highlighted the company’s focus on achieving medium-term goals despite challenges such as predicting Federal Reserve rate cuts.
The analysts emphasized that Ally Financial has moved away from providing specific timelines for achieving key milestones, particularly regarding its net interest margin (NIM) target in the high 3% range. This shift is attributed to the difficulty in forecasting Federal Reserve actions, which present near-term challenges but potential medium-term benefits. According to InvestingPro, Ally has maintained dividend payments for 10 consecutive years, currently offering a 3.41% yield.
Ally Financial remains optimistic about reaching its medium-term objectives. The company aims for a mid-teens core return on tangible common equity (ROTCE), supported by a high-3% NIM and sub-2% auto net charge-offs (NCOs). Analysts project the company’s core ROTCE to reach 15% over the next two years, aided by NIM improvements and disciplined expense management. For deeper insights into Ally’s financial health and growth potential, InvestingPro offers exclusive analysis and 6 additional key tips.
The reaffirmation of the Overweight rating reflects confidence in Ally Financial’s strategic execution and ability to navigate the current economic environment. With analyst price targets ranging from $30 to $56, the company’s focus remains on maintaining financial discipline and achieving its outlined targets.
In other recent news, Ally Financial Inc. has announced several key developments. The company reported the results of its annual shareholder meeting, where all director nominees were elected, and an advisory vote on executive compensation was approved. Additionally, Deloitte & Touche LLP was ratified as the independent auditor for 2025. In terms of financial performance, CEO Michael Rhodes mentioned at the Bernstein Conference that Ally’s net interest margin is expected to remain flat, with continued emphasis on expense discipline. Meanwhile, Citi analysts reaffirmed a Buy rating on Ally Financial, maintaining a $55 price target, expressing confidence in the company’s net interest margin goal and credit risk management. Barclays (LON:BARC), however, maintained an Equalweight rating with a $44 price target, citing concerns about the impact of tariffs and trade restrictions on the automobile industry. Ally Financial also completed the sale of its credit card division and announced plans to cease accepting mortgage applications, aligning with its strategy to focus on core business areas. Moreover, Michelle J. Goldberg was appointed to Ally’s Board of Directors, bringing extensive experience in technology and venture capital.
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