Ally Financial's Price Target Reduced to $35 by Evercore ISI Analyst

Evercore ISI analyst John Pancari has reduced Ally Financial's (ALLY) price target from $40 to $35, maintaining an In Line rating. The analyst's decision comes after revising earnings per share estimates and price targets for regional banks and specialty finance companies. The average target price for ALLY is $42.13 with a high estimate of $56.00 and a low estimate of $30.00, indicating a 27.29% upside from the current price of $33.10.

Ally Financial (ALLY) reported solid first-quarter (Q1) 2025 earnings, with adjusted earnings per share (EPS) of $0.58, supported by core pre-tax income of $247 million. The company's net interest margin (NIM) stood at 3.35%, up 2 basis points from the previous quarter, reflecting a strong performance across its core businesses [1].

Key highlights of the quarter include:
- Auto loan originations reached $10.2 billion, driven by a record 3.8 million applications, with an originated yield of 9.8%, up 17 basis points from the prior quarter [1].
- Insurance written premiums increased by 9% year-over-year to $385 million [1].
- Corporate finance HFI loans grew to $10.9 billion, up $1.3 billion from Q4 2024 [1].

Despite these strong results, the company's stock price was impacted by an updated price target from Evercore ISI analyst John Pancari. Pancari reduced Ally Financial's price target from $40 to $35, maintaining an In Line rating. The analyst cited revisions in earnings per share estimates and price targets for regional banks and specialty finance companies as the reason for the adjustment [2].

The average target price for Ally Financial stands at $42.13, with a high estimate of $56.00 and a low estimate of $30.00, indicating a 27.29% upside from the current price of $33.10 [2].

Ally Financial's strategic moves, such as the sale of its credit card business and securities repositioning transactions, have bolstered its balance sheet and positioned the company for growth. The company's focus on core franchises and disciplined capital management is expected to support long-term success.

References:
[1] https://www.barchart.com/story/news/31982732/ally-financial-ally-q1-2025-earnings-call-transcript
[2] https://www.barchart.com/story/news/31982732/ally-financial-ally-q1-2025-earnings-call-transcript

Ask Aime: What impact does Evercore ISI's price target reduction from $40 to $35 have on Ally Financial's stock price and investment strategy?

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