Ally Financial (ALLY) Receives a Buy from Oppenheimer


Oppenheimer analyst Dominick Gabriele maintained a Buy rating on Ally Financial (NYSE: ALLY) today and set a price target of $35. The company’s shares closed yesterday at $26.85.

Gabriele said:

“ALLY retail auto originations have been coming in at ~7.5%. We think some of the yield pickup vs. the 2Q18 average of 6.7% is due to the continued mix of used vehicle loans and rate hikes. Our retail auto waterfall analysis (exhibits 1/2) helps illustrate how much impact higher-yielding originated assets can have on a high turnover portfolio. We break it down quarter by quarter where we think the ongoing yield pickup could stem from. Even when we increase credit costs by one-third of yield increases related to a higher mix of used vs. new auto originations and account for a cumulative funding beta of 70% through 2020, we see EPS upside vs. consensus estimates in both 2019/20.”

Ally Financial has an analyst consensus of Moderate Buy, with a price target consensus of $33.67.

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Based on Ally Financial’s latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $2.61 billion and net profit of $349 million. In comparison, last year the company earned revenue of $2.52 billion and had a net profit of $282 million.

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Ally Financial, Inc. is a holding company, which provides digital financial services to consumers, businesses, automotive dealers, and corporate clients. It operates through the following segments: Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations.

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