Ally Financial Faces Stock Pressure Despite Positive Earnings Report

Shares of Ally Financial Inc (ALLY) saw continued pressure on Thursday following a previous session decline amidst a broader downturn in Wall Street stocks. The company’s recent earnings report amid an exciting season shed light on some key analyst insights. RBC Capital Markets analyst Jon Arfstrom maintained an Outperform rating and raised the price target to $49, citing earnings of 86 cents per share. Higher electric vehicle originations drove $92 million in tax credits, contributing to the positive earnings trend, highlighted Arfstrom.

Arfstrom emphasized a positive outlook for Ally Financial, foreseeing consistent margin expansion in the upcoming quarters as a main driver of expected earnings and returns. The analyst pointed out improved origination mix and credit expectations as factors likely to bolster the company’s performance in 2024 and beyond. On the other hand, BMO Capital Markets analyst James Fotheringham maintained a Market Perform rating with a price target of $39 for Ally Financial. Fotheringham highlighted core earnings beating consensus at 70 cents per share, with lower credit provisions offsetting disappointing revenues.

Notwithstanding encouraging aspects of the earnings report, Ally Financial’s shares experienced a 2.05% decline to $42.54 by the time of publication on Thursday. Fotheringham lowered core EPS estimates for 2024, 2025, and 2026 due to expectedly higher share counts from reduced share repurchases. As market observers monitor the company’s performance and the broader landscape, analyst sentiments remain somewhat bullish on Ally Financial’s future prospects.