Ally Financial initiated with a Buy at UBS

UBS initiated coverage of Ally Financial (ALLY) with a Buy rating and $56 price target The market appears to undervalue the next phase of Ally’s ROTCE improvement, which is projected to approach 14% in 2027 and rise further thereafter, the analyst tells investors in a research note. Gradual credit loss improvement, net interest margin expansion, share repurchases, and business simplifications-like exiting credit card and mortgage-are expected to drive higher returns, a cleaner balance sheet, and lower earnings volatility, UBS says.