Ally Financial Inc. (ALLY) Failing To Spot These Facts

Wall Street’s most bullish Ally Financial Inc. (NYSE:ALLY) analysts are predicting the share price to blow past $38 per share during the next 12 months. The current median share price forecast by them is $32, suggesting that the stock could increase 19.72% in that time frame. The average price target of $32.29 calls for a nearly 20.8% increase in the stock price.

Ally Financial Inc. (NYSE:ALLY) dropped -0.45% in recent trade and currently has a stock-market value of $10.84B. The shares finished at $26.73, after trading as low as $26.68 earlier in the session. It hit an intraday high Thursday at $26.895. Trading activity significantly weakened as the volume at ready counter decreased to 1,820,396 shares versus 2,964,080 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,410,686 shares. The stock is now 29.76% above against its bear-market low of $20.6 on December 26, 2018. It has retreated -8.49% since it’s 52-week high of $29 reached in April. Now the market price is down -6.44% on the year and up 17.96% YTD.

ALLY stock’s 50 day simple moving average (SMA 50) price is $25.95 and its 200-day simple moving average (SMA 200) price is $26.05. The company’s stock currently has a total float of 399.1M shares. Its weekly volatility is hovering around 1.15% and felt 1.42% volatility in price over a month. On the upside, the share price will test short term resistance at around $26.86. On a downside, the stock is likely to find some support, which begins at $26.64. The failure to get near-term support could push it to $26.55.

It had seen a positive analyst call from Sandler O’Neill, which upgraded the stock from Hold to Buy on February 26. Analysts at Barclays, maintained the company shares at Overweight on January 02 but switched target price from $35 to $34. The stock won favor of JP Morgan analysts who expressed their confidence in it using an upgrade from Neutral to Overweight on December 20.

When looking at valuations, Ally Financial Inc. (ALLY) has a cheap P/E of 9.2x as compared to industry average of 40.62x. Moreover, it trades for 6.63 times the next 12 months of expected earnings. Also, it is trading at rather inexpensive levels at just over 0.82x price/book and 1.2x price/sales. Compared to others, Ally Financial Inc. is in a different league with regards to profitability, having net margins of 14%. To put some perspective around this, the industry’s average net margin is 12.48%. ALLY’s ROE is 9.6%, which is also considerably worse than the industry’s ROE of 10.52%.

Shares of ALLY have gained 6.1% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Ally Financial Inc. (NYSE:ALLY) has topped consensus earnings estimates in 9 quarters (75%), missed earnings in 3 quarters (25%), whereas at 0 occasion EPS met analyst expectations. ALLY last reported earnings that exceeded expectations. The company raked in $0.92 per share, -91.06% change on the same period last year. That was better than consensus for $0.83. Revenue for the recent quarter stood at $1.44 billion, down -2% on last year and below the $1.53 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $1.48 billion to $1.6 billion, which should be compared with $1.55 billion generated last year. EPS is seen in a range of $0.72 to $0.88, against the $0.79 reported a year ago.