Ally Financials delivered solid 1Q financial results that affirm its continued ability to navigate the complexities triggered by the pandemic. Amid core business resilience, 1Q results were also supported by improving macroeconomic conditions on the re-opening of the economy.
The digital financial services company bounced back to profitability in 1Q with net income attributable to shareholders of $796 million. In contrast, the company posted a net loss of $319 million for the 1Q 2020. Net revenue was up $226 million to $1.4 billion, driven primarily by lower funding costs. Ally (ALLY) also benefited from higher gains on off-lease vehicles.
According to the Chief Executive Officer, Jeffrey J. Brown, perseverance and macroeconomic conditions were the primary catalysts behind the impressive 1Q results.
“The impressive momentum we carried into 2021 was fueled by our leading and adaptable auto and digital banking platforms and a culture centered around our promise to ‘Do It Right’ for our customers, employees and communities. This disciplined approach, along with our focus on generating long-term value for all our stakeholders, guides our strategy and positions us for continued success,” Brown added.
During the quarter, Ally reiterated its commitment to returning value to shareholders. It paid a dividend of $0.19 per share and completed $219 million worth of share repurchases. In addition, it ended the quarter with $15.2 billion in cash and cash equivalents.
Ally Financial shares are up 33.79% after a 16.6% pop in 2020. (See Ally Financials stock analysis on TipRanks).
JPMorgan’s analyst Richard Shane has since reiterated a Buy rating on the stock. While the analyst remains bullish about the consumer finance space into the 1Q reporting season, he maintains that “valuation is becoming a greater consideration”.
The analyst has since raised his price target from $48 to $54, implying 13.18% upside potential to current levels.
Meanwhile, Wall Street consensus estimates indicate Ally is a Strong Buy based on 10 Buy ratings. The average analyst price target of $56 implies 17.38% upside potential to current levels.
Similarly, the stock scores a “Perfect 10” on the TipRanks’ Smart Score rating system, implying it is well-positioned to outperform the overall market.
Related News
RedfinNow Expands Into Tucson As Las Vegas Operations Resume
Kroger Partners With Ocado Group For First Customer Fulfillment Center
Lizhi Partners With Tiger Brokers For Branded Podcasts
