Last Updated: 16 Sep 2024
Executive Summary
Ally Financial Inc. (ALLY) is a leading digital financial services company with a strong presence in the United States and Canada. The company offers a wide range of products and services to consumers, businesses, and corporate clients. Ally's stock price has been volatile in recent months, but the company remains fundamentally sound with strong earnings and a growing dividend.
Company Overview
Ally Financial Inc. is headquartered in Detroit, Michigan. The company was founded in 1919 as General Motors Acceptance Corporation (GMAC). In 2010, GMAC changed its name to Ally Financial Inc. Ally is a publicly traded company listed on the New York Stock Exchange (NYSE).
Ally's primary business segments include:
Auto Finance: Provides financing for new and used vehicles.
Consumer Banking: Offers checking and savings accounts, credit cards, and personal loans.
Commercial Banking: Provides financing and other services to businesses.
Corporate Finance: Provides financing and advisory services to corporations.
Fundamental Analysis
Ally Financial Inc. has a strong financial profile. The company has reported positive earnings per share (EPS) for the past four quarters. In the most recent quarter (Q2 2024), Ally reported EPS of $2.32, which beat analyst estimates. The company's revenue for the quarter was $6.78 billion, which was slightly below analyst estimates.
Ally's profitability metrics are also strong. The company's profit margin is 12.1%, and its operating margin is 14.9%. Ally's return on assets (ROA) is 0.0042%, and its return on equity (ROE) is 0.0602%.
Ally's financial leverage is moderate. The company's debt-to-equity ratio is 1.23, which is below the industry average. Ally's interest coverage ratio is 6.5x, which is also above the industry average.
Technical Analysis
Ally's stock price has been volatile in recent months. The stock reached a 52-week high of $45.16 in January 2024, but it has since fallen to $32.97. The stock is currently trading below its 50-day and 200-day moving averages.
The technical indicators for Ally are mixed. The relative strength index (RSI) is currently at 45.7, which indicates that the stock is neither overbought nor oversold. The moving average convergence divergence (MACD) is currently below the signal line, which indicates that the stock may be in a downtrend.
Short Term Outlook
The short-term outlook for Ally Financial Inc. is mixed. The company's financial performance is strong, but the stock price has been volatile. The technical indicators for the stock are also mixed.
In the short term, Ally's stock price could continue to fluctuate. The stock could rise if the company reports strong earnings in the next quarter. However, the stock could also fall if the company's earnings disappoint or if the overall market continues to decline.
Long Term Outlook
The long-term outlook for Ally Financial Inc. is positive. The company has a strong financial profile and a growing dividend. Ally is also well-positioned to benefit from the increasing demand for digital financial services.
In the long term, Ally's stock price is likely to rise. The stock could reach $42.63 by the end of 2024, which would represent a 25% upside from the current price.
Analyst Recommendations
Analysts have a positive outlook on Ally Financial Inc. Five analysts have a "Strong Buy" rating on the stock, six analysts have a "Buy" rating, and seven analysts have a "Hold" rating. Three analysts have a "Sell" rating, and no analysts have a "Strong Sell" rating.
The average analyst target price for Ally Financial Inc. is $42.63. This target price represents a 25% upside from the current price.
