Ally Financial (ALLY) PT Lowered to $62 at BofA Securities on Higher Annual Funding Costs

BofA Securities analyst Brandon Berman lowered the price target on Ally Financial (NYSE: ALLY) to $62.00 (from $77.00) while raising the 1Q22 EPS forecast by 5% as asset yields realize the early benefit of higher rates. However, EPS estimates for 2023/24e drop by 7%/6%, driven by rising funding costs.

The analyst reiterated a Buy rating, stating "We forecast a TTC deposit beta of 37% vs. 47% during the prior cycle. For 1Q, we expect the call to be dominated by questions pertaining to credit and net interest margin (NIM) defensibility; however, we hope for additional color on Ally Lending and Ally Invest, specifically the potential earnings contribution. Our new $62 PO offers 44% upside potential".

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