Ally Financial To Gain From NIM Recovery Amid Lower Tax Rate, Analyst Sees CEO Transition Soon
Portfolio Pulse from Nabaparna Bhattacharya
BMO Capital Markets analyst James Fotheringham maintained a Market Perform rating on Ally Financial Inc. (NYSE:ALLY) and increased the price target from $36 to $37. The analyst adjusted earnings estimates, lowering near-term estimates by 7% due to slower loan growth but raised the 2025 EPS estimate by 4% anticipating NIM recovery and a lower tax rate. The company's guidance suggests lower NIM, higher loan losses, and slower loan growth, but also higher other revenues and lower operating costs. A CEO transition is expected soon, which could lead to changes in guidance. Ally Financial's shares saw a slight increase of 0.17% to $36.38.
January 23, 2024 | 7:17 pm
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BMO Capital Markets analyst reiterates Market Perform rating on Ally Financial, raises price target to $37, and adjusts EPS estimates due to expected NIM recovery and lower tax rate, despite near-term challenges. A CEO transition is anticipated, which may affect future guidance.
The reiteration of the Market Perform rating and the slight increase in price target suggest a neutral to mildly positive outlook for Ally Financial. The mixed adjustments in EPS estimates reflect both near-term headwinds and long-term optimism. The expected CEO transition introduces uncertainty, which could lead to volatility in the stock price. However, the current share price movement is minimal, indicating a short-term neutral impact.
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