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BofA Lifts Ally Financial (ALLY) PT to $51 Fueled by $2B Share Buyback

Ally Financial Inc. (NYSE:ALLY) is one of the cheap stocks to buy for the next 3 years. On January 9, Bank of America raised the firm’s price target on Ally Financial to $51 from $42 and maintained a Buy rating on the shares. Although the firm acknowledged skepticism regarding the stock’s 14% premium over its pre-pandemic range, it remained bullish due to sustained price momentum. BofA pointed out that the stock’s outperformance against consumer finance peers since mid-November was largely driven by a $2 billion buyback authorization.

TD Cowen also raised the firm’s price target on Ally Financial, a day before the BofA rating, to $55 from $50 with a Buy rating. This adjustment reflects an updated outlook for the specialty finance sector, which is increasingly influenced by shifting macroeconomic factors and secular growth trends. The firm’s analysis highlights several key areas of the credit market expected to drive performance through 2026. These include consistent expansion in auto lending and credit cards, as well as the rising prominence of non-prime lending, student loans, and buy-now-pay-later services.

On the same day, UBS initiated coverage of Ally Financial Inc. (NYSE:ALLY) with a Buy rating and a $56 price target and suggested that the market is currently undervaluing the company’s trajectory for improving returns. UBS projected that Ally Financial’s ROTCE will trend toward 14% by 2027, with additional growth expected in subsequent years. This optimistic outlook is fueled by a combination of expanding net interest margins, steady improvements in credit losses, and the resumption of share repurchases.

Ally Financial Inc. (NYSE:ALLY) is a digital financial services company that provides various digital financial products and services in the US, Canada, and Bermuda.

While we acknowledge the potential of ALLY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ALLY and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

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  • 175 Teslas
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  • 140 Metas
  • 84 Googles
  • 65 Microsofts
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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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