Zacks Investment Research Downgrades Ally Financial (NYSE:ALLY) to Hold

Ally Financial (NYSE:ALLY) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Tuesday, Zacks.com reports. They presently have a $33.00 price objective on the financial services provider’s stock. Zacks Investment Research‘s price target suggests a potential upside of 4.86% from the stock’s previous close.

According to Zacks, “Shares of Ally Financial have outperformed the industry over the past six months. The company has an impressive earnings surprise history. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Initiatives to diversify revenue base, rise in consumer loan demand, higher interest rates and growth in net finance revenues will likely further support the company’s profitability. Moreover, the company's steady capital deployment activities indicate a strong balance sheet position. This is expected to continue to enhance shareholder value. However, mounting expenses (mainly due to expansion strategy) will likely hurt bottom-line growth to some extent. Moreover, the use of high levels of debt remains a major near-term concern as it might limit the company's flexibility and hence hamper financials.”

Several other research firms have also recently commented on ALLY. Oppenheimer set a $33.00 price target on Ally Financial and gave the company a “buy” rating in a report on Wednesday, April 17th. Morgan Stanley upped their price target on Ally Financial from $30.00 to $32.00 and gave the company an “equal weight” rating in a report on Monday, April 22nd. Finally, BMO Capital Markets upped their price target on Ally Financial to $39.00 and gave the company a “market perform” rating in a report on Monday, April 22nd. Six equities research analysts have rated the stock with a hold rating and eight have issued a buy rating to the company. The company presently has a consensus rating of “Buy” and an average price target of $33.25.

NYSE ALLY opened at $31.47 on Tuesday. Ally Financial has a twelve month low of $20.60 and a twelve month high of $31.70. The company has a quick ratio of 1.11, a current ratio of 1.11 and a debt-to-equity ratio of 3.03. The firm has a market cap of $12.40 billion, a PE ratio of 9.42, a PEG ratio of 0.62 and a beta of 1.31. The business’s 50-day simple moving average is $29.73.

Ally Financial (NYSE:ALLY) last posted its quarterly earnings data on Thursday, April 18th. The financial services provider reported $0.80 earnings per share for the quarter, topping the consensus estimate of $0.79 by $0.01. Ally Financial had a return on equity of 10.90% and a net margin of 23.12%. The business had revenue of $1.60 billion during the quarter, compared to analysts’ expectations of $1.53 billion. During the same quarter in the previous year, the firm earned $0.68 EPS. The firm’s revenue was up 13.9% compared to the same quarter last year. As a group, sell-side analysts predict that Ally Financial will post 3.62 earnings per share for the current fiscal year.

Ally Financial announced that its board has authorized a stock repurchase plan on Monday, April 1st that authorizes the company to repurchase $1.25 billion in outstanding shares. This repurchase authorization authorizes the financial services provider to purchase up to 10.5% of its stock through open market purchases. Stock repurchase plans are generally an indication that the company’s management believes its stock is undervalued.

In other Ally Financial news, CAO David J. Debrunner sold 2,222 shares of the stock in a transaction on Monday, July 1st. The stock was sold at an average price of $31.32, for a total value of $69,593.04. Following the transaction, the chief accounting officer now directly owns 105,757 shares in the company, valued at approximately $3,312,309.24. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Mayree C. Clark acquired 5,000 shares of the firm’s stock in a transaction on Thursday, May 2nd. The stock was purchased at an average price of $29.71 per share, for a total transaction of $148,550.00. Following the completion of the transaction, the director now directly owns 46,248 shares in the company, valued at approximately $1,374,028.08. The disclosure for this purchase can be found here. Over the last 90 days, insiders have sold 6,666 shares of company stock worth $199,802. 0.35% of the stock is owned by corporate insiders.

A number of institutional investors and hedge funds have recently made changes to their positions in ALLY. BlackRock Inc. lifted its stake in shares of Ally Financial by 1.2% in the 4th quarter. BlackRock Inc. now owns 27,716,879 shares of the financial services provider’s stock valued at $628,066,000 after purchasing an additional 333,971 shares during the period. Oaktree Capital Management LP lifted its stake in shares of Ally Financial by 34.6% in the 4th quarter. Oaktree Capital Management LP now owns 11,723,541 shares of the financial services provider’s stock valued at $265,655,000 after purchasing an additional 3,011,141 shares during the period. Lakewood Capital Management LP lifted its stake in shares of Ally Financial by 20.3% in the 4th quarter. Lakewood Capital Management LP now owns 10,864,809 shares of the financial services provider’s stock valued at $246,197,000 after purchasing an additional 1,829,956 shares during the period. Dimensional Fund Advisors LP lifted its stake in shares of Ally Financial by 0.6% in the 4th quarter. Dimensional Fund Advisors LP now owns 7,022,630 shares of the financial services provider’s stock valued at $159,132,000 after purchasing an additional 39,461 shares during the period. Finally, Magnolia Group LLC lifted its stake in shares of Ally Financial by 30.5% in the 1st quarter. Magnolia Group LLC now owns 5,626,671 shares of the financial services provider’s stock valued at $154,677,000 after purchasing an additional 1,315,199 shares during the period. Hedge funds and other institutional investors own 97.02% of the company’s stock.

Ally Financial Company Profile

Ally Financial Inc provides various financial products and services to consumers, businesses, automotive dealers, and corporate customers primarily in the United States and Canada. It operates through Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments.

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