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Tuesday, shares of Ally Financial (NYSE: NYSE:ALLY) saw a revision in their price target by Truist Securities, which was lowered to $41.00 from the previous $45.00. Despite this change, the firm maintained a Buy rating on the stock. The adjustment followed the inclusion of the actual securities loss realized in the first quarter of the year into the earnings estimates. Currently trading at $30.09, near its 52-week low of $29.52, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $30 to $56.
The revised estimates for Ally’s earnings per share (EPS) for the year 2025 are now set at $2.20, down from the earlier projection of $3.03. For the year 2026, the EPS forecast has been slightly reduced to $5.95 from $6.00. The main factor influencing the 2025 estimate is the inclusion of the realized securities loss from the first quarter’s actual results. InvestingPro data reveals that 9 analysts have recently revised their earnings estimates downward, though the company maintains a 3.99% dividend yield with a 10-year track record of consistent payments.
In addition, Truist Securities has decided to maintain their estimates for the adjusted tangible book value per share (TBVPS) for 2025 and 2026 at $39 and $45, respectively. However, they have reduced the price to tangible book multiple to 0.9x, taking into account the potential risk of a recession.
The rationale behind maintaining the Buy rating for Ally Financial is based on several positive factors that the firm sees in the company’s future. These include an improvement in retail auto credit, potential for margin expansion, and growth in tangible book value, which is expected to recover from the bond loss. The combination of these elements supports the firm’s positive outlook on Ally Financial’s stock, despite the revised price target.
In other recent news, Ally Financial Inc reported its first-quarter earnings for 2025, exceeding analysts’ expectations. The company announced an adjusted earnings per share (EPS) of $0.58, surpassing the forecasted $0.47, and adjusted net revenue of $2.1 billion, beating the anticipated $2.03 billion. Ally Financial also completed the sale of its credit card business, allowing it to focus more on its core operations, such as auto lending and digital banking. The firm reported record auto loan applications and increased digital banking engagement, with consumer auto originations totaling $10.2 billion. The digital bank’s customer base expanded to 3.3 million, with deposits reaching $146 billion. Analysts from KBW and Morgan Stanley (NYSE:MS) have discussed the company’s strategic focus and its ability to navigate the current macroeconomic environment. These developments reflect Ally Financial’s strong position in the market and its strategic moves to enhance its core business operations.
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