The Bull Case For Ally Financial (ALLY) Could Change Following Mounting Capital Ratio And Earnings Pressures

• In recent years, Ally Financial has faced a 3.2% annual sales decline and falling earnings per share, while its tier one capital ratio stands at 9.7%, raising questions about balance sheet resilience as of today, 9 December 2025.
• These pressures suggest investors are increasingly focused on whether Ally’s current capital and earnings profile can withstand a more challenging credit and funding backdrop.
• We’ll now examine how concerns over Ally’s relatively low tier one capital ratio may reshape the company’s existing investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

Ally Financial Investment Narrative Recap

To own Ally Financial today, you need to believe its digital banking and auto finance franchise can still compound value despite recent sales pressure and a modest 9.7% tier one capital ratio. The latest figures sharpen near term focus on credit quality and funding costs, but do not obviously change the key catalyst of improving net interest margins or the biggest current risk of credit losses if the economy weakens.

The most relevant recent development is Ally’s Q3 2025 earnings, which showed net income of US$398,000,000 and EPS of US$1.18 despite earlier quarters being hit by a US$423,000,000 one off loss. That mix of recovering profitability and prior one offs frames how investors interpret today’s lower capital cushion against any future credit or funding stress.

Yet investors should pay close attention to how a weaker capital position could interact with rising credit uncertainty and...

Read the full narrative on Ally Financial (it's free!)

Ally Financial’s narrative projects $9.6 billion revenue and $1.8 billion earnings by 2028. This requires 12.0% yearly revenue growth and about a $1.5 billion earnings increase from $324.0 million today.

Uncover how Ally Financial's forecasts yield a $48.06 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Nine members of the Simply Wall St Community currently see Ally’s fair value anywhere between US$36.04 and US$56.49 per share, reflecting a wide spread of expectations. You can weigh those views against concerns that a 9.7% tier one capital ratio may leave Ally more exposed if consumer credit conditions soften, and consider how that might shape the company’s resilience and earnings quality.

Explore 9 other fair value estimates on Ally Financial - why the stock might be worth 15% less than the current price!

Build Your Own Ally Financial Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Ally Financial research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Ally Financial research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ally Financial's overall financial health at a glance.

No Opportunity In Ally Financial?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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