Ally Financial (NYSE:ALLY) Releases Earnings Results, Misses Expectations By $0.01 EPS

Ally Financial (NYSE:ALLY) issued its earnings results on Tuesday. The financial services provider reported $1.21 EPS for the quarter, missing analysts’ consensus estimates of $1.22 by ($0.01), FiscalAI reports. The company had revenue of $2.28 billion during the quarter, compared to analysts’ expectations of $2.22 billion. Ally Financial had a return on equity of 11.75% and a net margin of 16.75%.The firm’s quarterly revenue was up 9.8% compared to the same quarter last year. During the same quarter in the previous year, the company earned $0.99 EPS.

Here are the key takeaways from Ally Financial’s conference call:

• Second-quarter results were strong, with adjusted EPS up 22% year over year to $1.21, adjusted revenue up 10%, and core ROTCE reaching 11.8%. Management said the quarter showed its strategy is driving higher earnings power and better operating performance.
• Auto finance growth remained robust, as retail auto applications hit a record 4.6 million and originations rose 21% to $13.3 billion. The company said dealer relationships and a larger top of funnel are supporting continued growth, though it expects growth rates to moderate later in the year.
• Credit performance improved, but management stayed cautious. Retail auto net charge-offs fell to 157 bps and improved for a sixth straight quarter year over year, yet delinquencies remain elevated and the company is watching macro pressures like inflation and energy costs.
• Net interest margin expanded and guidance remains constructive, with NIM rising to 3.63% in the quarter, helped by lower deposit costs. Management still expects NIM to trend toward the upper 3% range over time and said the full-year guide remains intact.
• Capital and shareholder returns continued to improve, with CET1 at 10.1%, additional benefits from a completed credit risk transfer, and continued share repurchases. Ally also maintained its quarterly dividend and said its capital build is largely complete, leaving it positioned to keep returning capital while funding growth.

Ally Financial Stock Up 0.4%

ALLY stock opened at $44.63 on Thursday. The company has a current ratio of 0.92, a quick ratio of 0.93 and a debt-to-equity ratio of 1.26. The firm has a 50-day moving average of $44.25 and a two-hundred day moving average of $42.63. Ally Financial has a 12 month low of $35.92 and a 12 month high of $47.29. The company has a market cap of $13.68 billion, a price-to-earnings ratio of 10.53, a PEG ratio of 0.25 and a beta of 1.09.

Ally Financial Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, August 14th. Investors of record on Friday, July 31st will be paid a dividend of $0.30 per share. This represents a $1.20 annualized dividend and a yield of 2.7%. The ex-dividend date of this dividend is Friday, July 31st. Ally Financial’s dividend payout ratio is currently 29.27%.

Insider Activity at Ally Financial

In related news, insider Stephanie N. Richard sold 5,000 shares of Ally Financial stock in a transaction that occurred on Friday, May 15th. The stock was sold at an average price of $42.14, for a total transaction of $210,700.00. Following the transaction, the insider owned 93,927 shares in the company, valued at approximately $3,958,083.78. This trade represents a 5.05% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Corporate insiders own 0.46% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the company. Safe Harbor Fiduciary LLC acquired a new position in Ally Financial in the 4th quarter valued at about $37,000. CIBC Private Wealth Group LLC lifted its holdings in Ally Financial by 805.1% in the fourth quarter. CIBC Private Wealth Group LLC now owns 896 shares of the financial services provider’s stock valued at $41,000 after acquiring an additional 797 shares during the last quarter. Brown Brothers Harriman & Co. grew its position in Ally Financial by 31.5% in the fourth quarter. Brown Brothers Harriman & Co. now owns 1,052 shares of the financial services provider’s stock worth $48,000 after acquiring an additional 252 shares during the period. Larson Financial Group LLC increased its stake in Ally Financial by 67.0% during the third quarter. Larson Financial Group LLC now owns 1,072 shares of the financial services provider’s stock worth $42,000 after acquiring an additional 430 shares during the last quarter. Finally, EverSource Wealth Advisors LLC raised its position in Ally Financial by 374.9% in the second quarter. EverSource Wealth Advisors LLC now owns 1,477 shares of the financial services provider’s stock valued at $58,000 after purchasing an additional 1,166 shares during the period. Institutional investors and hedge funds own 88.76% of the company’s stock.

Analysts Set New Price Targets

A number of brokerages have issued reports on ALLY. Morgan Stanley boosted their price target on Ally Financial from $53.00 to $55.00 and gave the company an “overweight” rating in a report on Monday, April 20th. Royal Bank Of Canada boosted their target price on shares of Ally Financial from $52.00 to $55.00 and gave the company an “outperform” rating in a research note on Friday, July 10th. Truist Financial set a $54.00 price target on shares of Ally Financial in a research report on Tuesday, April 21st. Wall Street Zen lowered shares of Ally Financial from a “buy” rating to a “hold” rating in a research note on Monday, June 8th. Finally, Citigroup cut their price target on Ally Financial from $70.00 to $58.00 and set a “buy” rating for the company in a research note on Tuesday, June 23rd. Fourteen analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $53.86.

About Ally Financial

Ally Financial Inc is a leading digital financial services company headquartered in Detroit, Michigan. The company offers a comprehensive suite of banking, lending, and insurance products designed for retail and commercial customers. Through its online-only platform, Ally Bank provides checking and savings accounts, certificates of deposit, money market accounts, and home mortgages, emphasizing competitive rates and user-friendly mobile and web experiences.

In addition to its banking operations, Ally Financial is a major player in automotive financing and leasing.