Overview

• U.S. digital bank and auto lender's Q1 adjusted EPS rose 90% yr/yr, beating analyst expectations

• Q1 revenue increased 36% yr/yr to $2.1 bln

• Company repurchased $147 mln in shares during the quarter

Outlook

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

Result Drivers

• AUTO FINANCE ORIGINATIONS - Growth in consumer auto originations and higher portfolio yields contributed to increased net financing revenue, despite higher provision and noninterest expenses

• INSURANCE SEGMENT - Improved insurance results driven by lower weather losses and higher investment income

• COST REDUCTIONS - Lower noninterest expense mainly due to the sale of the credit card business and reduced weather-related insurance losses

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 $52.00, about 23.9% above its April 16 closing price of $41.96

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

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