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To own Ally Financial, you need to be comfortable with a bank that is still heavily tied to auto credit while leaning on its digital model, core auto franchise, and capital return to drive value. The key short term catalyst remains how credit quality and auto originations trend, and this latest round of conference appearances and education initiatives does not materially change that. The biggest risk continues to be concentration in auto lending if credit conditions or auto financing demand weaken.
The company’s recently announced multi year US$2,000,000,000 share repurchase plan is the most relevant backdrop here, because it amplifies the impact of whatever happens next in its core auto and consumer credit book. If credit trends hold up and earnings stay resilient, buybacks can enhance per share results, but if losses rise or funding costs bite, committing to repurchases may leave Ally with less flexibility when it most needs balance sheet strength.
Yet behind this positive narrative, investors should also be aware of how dependent Ally still is on auto lending and what happens if...
Read the full narrative on Ally Financial (it's free!)
Ally Financial's narrative projects $9.6 billion revenue and $1.8 billion earnings by 2028.
Uncover how Ally Financial's forecasts yield a $53.06 fair value, a 25% upside to its current price.
Some of the lowest estimate analysts are far more cautious than consensus, even while still projecting earnings of about US$1.9 billion by 2028, reminding you that views on Ally’s auto concentration risk can differ sharply and that both their cautious forecasts and the new conference signals could reshape expectations from here.
Explore 8 other fair value estimates on Ally Financial - why the stock might be worth as much as 33% more than the current price!
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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