Ally Financial price target lowered to $45 from $49 at Morgan Stanley

Morgan Stanley lowered the firm’s price target on Ally Financial to $45 from $49 and keeps an Overweight rating on the shares after management provided negative Q3-to-date updates on credit and net interest margin at an industry conference yesterday. The company is not yet officially changing 2024 guidance, and did not provide Q3 guidance to quantify the challenges highlighted yesterday, notes the analyst, who thinks the stock may struggle to gain traction until the company provides more clarity, particularly on the credit picture. However, the firm still sees “sizable” EPS growth of 76% and 28% in 2025 and 2026, respectively, as the benefit of lower rates overcome near-term challenges.