Ally Financial's Q2 adj revenue beats on record consumer auto applications

Overview

• U.S. auto lender's Q2 adjusted revenue beat analyst expectations

• Adjusted EPS for Q2 rose 22% yr/yr but missed analyst expectations

• Company executed $148 mln in share repurchases during the quarter

Outlook

• Company did not provide specific financial guidance for the current or future periods in the press release

Result Drivers

• AUTO ORIGINATIONS - Record consumer auto applications and 21% yr/yr growth in originations drove asset and revenue growth

• INSURANCE PREMIUMS - Higher insurance written premiums, up 9% yr/yr, contributed to revenue growth

• CORPORATE FINANCE - Segment delivered higher pre-tax income on asset growth and favorable provision expense

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy"

• Wall Street's median 12-month price target for Ally Financial Inc is $55.00, about 20.8% above its July 20 closing price of $45.52

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 7 three months ago

Reuters Recommended Reads

• July 21 - Synchrony beats profit estimates on solid spending, higher interest income

• July 21 - U.S. auto industry races to purge Chinese connected-car hardware amid federal push

• July 21 - KeyCorp Q2 net interest income rises on lower deposit costs

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)