- The results show the company as "effectively navigating" a tough credit environment, says BTIG's Mark Palmer. Further, weak used vehicle pricing and the hurricanes only had a modest impact on operating earnings.
- Unlike some of the big banks who are retreating from auto lending in recent quarters thanks to credit fears, Ally (ALLY +1.6%) has stood its ground, says Palmer - not trying to grow its book, but instead looking to get paid more the loans they do make.
- Palmer acknowledges charge-offs did rise eight basis points from last year, and provisions of 314M were above estimates, but notes estimated retail auto originated yield of 6.3% suggests Ally is getting paid well for the extra risk.
- He reiterates a Buy rating and $30 price target (another 20% upside).
- Previously: Ally Financial beats by $0.06, revenue in-line (Oct. 25)
- Now read: Hilariously Priced Dividend Yields By New York's Preferred Shares
Original article