Wells Fargo Upgrades Ally Financial to Equal-Weight with a Higher Price Target

Wells Fargo upgraded Ally Financial (ALLY) to "Equal-Weight" from "Underweight" and raised its price target to $45.00 from $37.00, a 21.62% increase. Ally Financial is one of the largest consumer auto lenders in the US, with a diversified business model including auto insurance, commercial loans, credit cards, and mortgage debt. The average analyst target price for Ally Financial is $46.13, implying a 12.38% upside from the current price of $41.05.

Wells Fargo upgraded Ally Financial (ALLY) to "Equal-Weight" from "Underweight" and raised its price target to $45.00 from $37.00, a 21.62% increase [1]. The upgrade reflects improving fundamentals in auto lending and a more balanced macro backdrop [2]. Ally Financial, one of the largest consumer auto lenders in the US, has a diversified business model that includes auto insurance, commercial loans, credit cards, and mortgage debt [3].

The average analyst target price for Ally Financial is $46.13, implying a 12.38% upside from the current price of $41.05 [1]. Wells Fargo noted that while higher interest rates and elevated auto delinquencies have weighed on performance, recent revisions to earnings forecasts reflect more realistic expectations. The firm also cited modest improvements in net charge-offs (NCOs) and net interest margin (NIM) guidance in the near term [2].

The Federal Reserve's consideration of rate cuts has improved Ally's risk/reward profile. Even small reductions in rates could support margins, as auto loans are fixed-rate but funded by deposits. Management's 2025 NIM guide of 3.4%-3.5% could have upside, with every 10 basis-point increase translating to a 10% EPS lift, according to Wells Fargo [2].

Ally Financial's stock has been the subject of numerous analyst upgrades and price target increases in recent months. Other analysts have also raised their price targets, reflecting a generally positive outlook for the company's financial performance [1].

References:
[1] https://www.gurufocus.com/news/3089841/wells-fargo-upgrades-ally-financial-ally-with-a-new-price-target-ally-stock-news
[2] https://site.financialmodelingprep.com/market-news/ally-financial-upgraded-to-equal-weight-at-wells-fargo-on-improving-outlook
[3] https://www.marketscreener.com/news/wells-fargo-upgrades-ally-financial-to-equalweight-from-underweight-adjusts-pt-to-45-from-37-ce7c50d3dd8ff62d