Citi Reiterates Buy Rating on Ally Financial (ALLY)

Citi analyst Keith Horowitz reiterated a Buy rating and $50.00 price target on Ally Financial (NYSE: ALLY).

The analyst comments "ALLY has underperformed since mgmt.’s recent commentary on weaker credit trends in 3Q (see note), which we believe has created a very attractive entry point. In our view, 1) last 6 quarters of originations will see curtailment benefits, so while loss outlook is higher over next 12-18months due to credit issues plaguing ‘22/1Q23 vintages, ‘26 will see significant improvement on these short-duration assets; 2) despite NIM pressure in 2H24, we remain confident in liability sensitivity with 4%+ NIM in ’26 (see note on NIM walk); 3) expect ~20% TBV growth to $42 in ‘25, so we see stock currently trading at 0.8x 4Q25 TBV with ’26 mid-teens ROTCE. Ultimately, we believe selloff more a reflection of open-ended messaging vs fundamentals and anticipate mgmt. providing more detailed scenarios at 3Q to better frame near-term headwinds. Moving Buy-rated ALLY to our top pick, reit TP of $50."

For an analyst ratings summary and ratings history on Ally Financial click here. For more ratings news on Ally Financial click here.

Shares of Ally Financial closed at $34.97 yesterday.

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