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Ally Financial Inc ALLY

Morningstar Rating
$38.80 +0.44 (1.15%)
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Company Report

Portfolio and Deposit Structure Leave Some Consumer Banks With Limited Exposure to Lower Rates

After two years of rapid interest rate hikes, the rising rate cycle is likely over. While there is still considerable uncertainty surrounding the path that interest rates will take from here, the market is now anticipating falling interest rates in 2024, with interest rate futures projecting one to three rate cuts in 2024 and even more the following year. Like their traditional banking peers, many of the consumer finance-focused banks in our coverage did benefit from rising interest rates. However, this benefit was not uniform; there were clear winners and losers. We expect a similar phenomenon in a period of falling interest rates, with different firms holding significantly different exposure to interest rate movements.

Price vs Fair Value

ALLY is trading at a 574% premium.
Price
$38.80
Fair Value
$55.00
Uncertainty
High
1-Star Price
$75.20
5-Star Price
$35.20
Economic Moat
Pcny
Capital Allocation
Nsmjjymk

Bulls Say, Bears Say

Bulls

Ally has had material success in improving its funding structure, which will lead to wider net interest margins going forward.

Bears

Auto loans and consumer credit in general are likely entering a period of higher credit costs and lower profitability as economic pressure on consumers builds.

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News

Trading Information

Previous Close Price
$38.36
Day Range
$38.4839.16
52-Week Range
$22.5441.77
Bid/Ask
$38.75 / $39.18
Market Cap
$11.79 Bil
Volume/Avg
1.8 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
14.42
Price/Sales
1.33
Dividend Yield (Trailing)
3.07%
Dividend Yield (Forward)
3.07%
Total Yield
3.39%

Company Profile

Formerly the captive financial arm of General Motors, Ally Financial became an independent publicly traded firm in 2014 and is one of the largest consumer auto lenders in the country. While the firm has expanded its product offerings over time, it remains primarily focused on auto lending with more than 70% of its loan book in consumer auto loans and dealer financing. Ally also offers auto insurance, commercial loans, credit cards, and holds a portfolio of mortgage debt, giving the bank a diversified business model, which includes brokerage services.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Mid Value
Total Number of Employees
11,100

Competitors

Valuation

Metric
ALLY
SYF
DFS
Price/Earnings (Normalized)
14.428.5510.86
Price/Book Value
1.041.222.25
Price/Sales
1.331.171.89
Price/Cash Flow
2.771.923.82
Price/Earnings
ALLY
SYF
DFS

Financial Strength

Metric
ALLY
SYF
DFS
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
ALLY
SYF
DFS
Return on Assets (Normalized)
0.42%2.61%1.60%
Return on Equity (Normalized)
7.37%22.66%17.20%
Return on Invested Capital (Normalized)
Return on Assets
ALLY
SYF
DFS
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SYF
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