Morgan Stanley reports on Ally Financial

Morgan Stanley on Friday reviewed Ally financial Inc. ALLY. Analysts rate the bank as Overweight and lowered their price target from $30.00 to $27.00.

Morgan Stanley wrote, “With expected loss of a large portion of lease volume, expect longer trajectory to sustainable double digit ROTCE as Ally focuses on taking share in used & non-GM/Chrysler lending. Upside could come from proactive liability management on long-dated, high cost debt.”

In their investment thesis analysts at Morgan Stanley cite 5 key reasons why they rate Ally as overweight.

1. Ally has a distinctive business model with an unmatched breadth of products.

2. Ally Financial is the top ranked non captive auto finance provider with over 90 years of operations.

3. The bank is well positioned in a growing market segment, with a direct banking platform that is cost efficient and highly scalable.

4. Their portfolio is concentrated in low risk and short duration assets.

5. Their highly experienced management team.

For the fourth quarter Ally posted revenues of 1.1 billion and EPS of 0.40, in line with Wall Street estimates.

ALly Financial has traded at $19.34, down 1.3 percent.