Ally Financial upgraded to Overweight from Equal Weight at Morgan Stanley

Morgan Stanley upgraded Ally Financial (ALLY) to Overweight from Equal Weight with a price target of $47, up from $37, as a new analyst assumed primary coverage. Following Q4 reporting, the firm is incrementally more bullish on prospects of a softer credit landing and identifies Ally and Discover (DFS) as two ways to play that theme. For Ally, the analyst sees lower rates driving a large benefit to net interest margin and EPS in the second half of 2024 and 2025 However, the credit cycle is not yet over, as net charge offs are set to rise though 2024, adds the analyst, who maintains an In-Line rating on the Consumer Finance industry.