UPDATE: Deutsche Bank Initiates Coverage On Ally Financial On Interesting ROE Recovery Story

In a report published Tuesday, Deutsche Bank analyst David Ho initiated coverage on

with a Hold rating and $26.00 price target. In the report, Deutsche Bank noted, “Ally Financial represents an interesting ROE recovery story within the consumer lending space. While there are many moving pieces, there is a path to 9-10% ROTCE by 2015 (vs. 7% currently) from lower expenses, lower funding costs, and some capital actions, in our view. However, we believe upside to returns (and the stock) will depend on more aggressive capital deployment (which we believe will be further out) and better underlying revenue growth (which may be difficult). We believe the valuation is fair at the current ROE/earnings trajectory. HOLD.” Ally Financial closed on Monday at $24.45.