Ally Financial (NYSE:ALLY) Issues Earnings Results, Beats Estimates By $0.08 EPS

Ally Financial (NYSE:ALLY) posted its quarterly earnings results on Wednesday. The financial services provider reported $1.09 earnings per share for the quarter, topping the consensus estimate of $1.01 by $0.08, FiscalAI reports. The business had revenue of $2.17 billion during the quarter, compared to the consensus estimate of $2.15 billion. Ally Financial had a return on equity of 9.96% and a net margin of 8.10%.The firm’s revenue for the quarter was up 4.8% compared to the same quarter last year. During the same period in the prior year, the company posted $0.78 EPS.

Here are the key takeaways from Ally Financial’s conference call:

• Ally reported a strong 2025: adjusted EPS $3.81 (+62% YoY), core ROTCE 10.4% (up ~300 bps), adjusted net revenue $8.5B, and fully phased-in CET1 up ~120 bps, signaling material improvement in profitability and capital.
• Retail auto and corporate finance growth is driving performance—loans up ~5% in 2025, retail auto originations and application volume at record levels, and full-year retail auto NCOs fell below 2% (1.97%), supporting the path to mid-teens returns.
• Management guided 2026 NIM to 3.6%–3.7% with an expectation to reach the upper‑threes over time, but warned of near‑term quarter-to-quarter choppiness (Q1 slight decline) driven by early beta and some lease residual pressures.
• Capital actions: Ally authorized a $2 billion open‑ended share repurchase program (repurchased $24M so far) while continuing to build capital toward a ~9% fully phased‑in CET1 target and prioritizing organic growth and the dividend.
• Near‑term risks include lease residual losses (notably on certain plug‑in hybrids after EV tax credit changes and an OEM recall), sensitivity to used vehicle values and the labor market, and management’s decision to keep retail auto reserves steady given macro uncertainty.

Ally Financial Stock Down 0.1%

NYSE:ALLY opened at $42.37 on Thursday. The company has a market cap of $13.05 billion, a price-to-earnings ratio of 25.52, a price-to-earnings-growth ratio of 0.21 and a beta of 1.17. Ally Financial has a twelve month low of $29.52 and a twelve month high of $47.27. The company has a current ratio of 0.92, a quick ratio of 0.92 and a debt-to-equity ratio of 1.31. The stock has a fifty day simple moving average of $43.31 and a 200-day simple moving average of $41.11.

Ally Financial Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, February 17th. Shareholders of record on Monday, February 2nd will be paid a $0.30 dividend. The ex-dividend date is Monday, February 2nd. This represents a $1.20 dividend on an annualized basis and a yield of 2.8%. Ally Financial’s dividend payout ratio (DPR) is presently 72.29%.

Institutional Investors Weigh In On Ally Financial

A number of institutional investors and hedge funds have recently added to or reduced their stakes in ALLY. Royal Bank of Canada increased its position in shares of Ally Financial by 106.5% during the first quarter. Royal Bank of Canada now owns 251,123 shares of the financial services provider’s stock worth $9,158,000 after acquiring an additional 129,497 shares during the period. NewEdge Advisors LLC increased its holdings in Ally Financial by 22.8% during the 1st quarter. NewEdge Advisors LLC now owns 2,235 shares of the financial services provider’s stock worth $82,000 after purchasing an additional 415 shares during the period. Empowered Funds LLC raised its position in Ally Financial by 11.1% during the 1st quarter. Empowered Funds LLC now owns 12,900 shares of the financial services provider’s stock valued at $470,000 after purchasing an additional 1,292 shares in the last quarter. Focus Partners Wealth purchased a new stake in shares of Ally Financial in the 1st quarter worth $259,000. Finally, EverSource Wealth Advisors LLC increased its stake in shares of Ally Financial by 374.9% during the second quarter. EverSource Wealth Advisors LLC now owns 1,477 shares of the financial services provider’s stock valued at $58,000 after buying an additional 1,166 shares during the period. Institutional investors own 88.76% of the company’s stock.

Wall Street Analysts Forecast Growth

Several research firms recently weighed in on ALLY. BTIG Research reaffirmed a “neutral” rating on shares of Ally Financial in a research note on Tuesday, January 6th. JPMorgan Chase & Co. increased their price target on Ally Financial from $43.00 to $48.00 and gave the company an “overweight” rating in a research note on Monday, January 12th. Keefe, Bruyette & Woods decreased their price target on shares of Ally Financial from $56.00 to $51.00 and set an “outperform” rating on the stock in a research note on Wednesday, October 1st. The Goldman Sachs Group reissued a “neutral” rating and issued a $55.00 price objective on shares of Ally Financial in a research note on Tuesday, January 6th. Finally, Truist Financial increased their price target on shares of Ally Financial from $47.00 to $51.00 and gave the company a “buy” rating in a report on Monday, December 22nd. Twelve analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average target price of $49.44.

Trending Headlines about Ally Financial

Here are the key news stories impacting Ally Financial this week:

• Positive Sentiment: Quarterly beat and revenue growth: Ally reported Q4 EPS of $1.09 vs. the $1.02 consensus and revenue of $2.17B (up ~4.8% YoY), showing underlying earnings power this quarter. MarketBeat Q4 release
• Positive Sentiment: Financing revenue and profit growth: Coverage highlights that financing revenue drove higher profit in the quarter, supporting near-term profitability. MarketWatch article
• Positive Sentiment: Shareholder returns increased: Management authorized a $2.0B share buyback and declared a $0.30 quarterly dividend, boosting capital return that should support EPS and investor confidence. MSN buyback article | PR Newswire dividend release
• Neutral Sentiment: Full quarter disclosure and materials available: The company released its 4Q/2025 results, slide deck and earnings call transcript for investors to dig into loan mix, margin drivers and credit metrics. Press release / slide deck | Earnings call transcript
• Neutral Sentiment: Key metrics vs. estimates: Analysts note the beat but urge scrutiny of NIM, credit trends and capital ratios as inputs for 2026 forecasts. Zacks analysis
• Negative Sentiment: Auto-finance weakness and margin miss are the main near-term drags: Coverage highlights investor concern that auto lending softened and reported margins fell short of earlier guidance — the primary reason shares are trading lower despite the beat. Investing.com article | Bloomberg margin story
• Negative Sentiment: Capital allocation and capital ratio concerns: Analysts downgraded the stock to Hold after the stock rally, citing faster capital returns (the $2B buyback) while pro forma CET1 fell to a low ~8.3%, increasing capital risk if credit or funding conditions worsen. Seeking Alpha downgrade note
• Negative Sentiment: Management flagging economic risks: Management and coverage warn of potential macro pressure ahead that could weigh on auto volumes, losses and margin outlook. American Banker article

Ally Financial announced that its board has authorized a share repurchase program on Wednesday, December 10th that allows the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization allows the financial services provider to buy up to 15.3% of its stock through open market purchases. Stock repurchase programs are typically an indication that the company’s leadership believes its stock is undervalued.

About Ally Financial

Ally Financial Inc is a leading digital financial services company headquartered in Detroit, Michigan. The company offers a comprehensive suite of banking, lending, and insurance products designed for retail and commercial customers. Through its online-only platform, Ally Bank provides checking and savings accounts, certificates of deposit, money market accounts, and home mortgages, emphasizing competitive rates and user-friendly mobile and web experiences.

In addition to its banking operations, Ally Financial is a major player in automotive financing and leasing.