JPMorgan analyst Richard Shane raised the firm’s price target on Ally Financial to $35 from $27 and keeps a Neutral rating on the shares. Entering 2024 the analyst believes investors should adopt a “more defensive positioning” in the consumer finance sector. This is a reversal from the firm’s bullish outlook in 2023 that was predicated on the belief that the market was fully discounting “the most anticipated/predicted economic slowdown in generations.” With multiples having rebounded towards historic norms, JPMorgan believes the risk/reward outlook for the space is less compelling. It believes lower and middle income borrowers are facing pressure from depleted pandemic savings and the lingering effects of high inflation.
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