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Exclusive News Ally Financial Pops on Q4 Earnings Beat and $2 Billion BuybackAuthored by Jordan Chussler. Posted: 1/23/2026. 
Quick Look - The financials sector has been the S&P 500’s worst performer over the past month, posting a loss of 2.99%.
- Shares of financial services firm Ally jumped 7% on Wednesday after the company reported record EPS growth.
- The company also announced that it has authorized a $2 billion stock buyback program.
Over the past month, the financial services sector has been the worst performer in the S&P 500, down 2.99%. Over the past six months, its 1.26% gain ranks second-worst. But as Q4 earnings season begins in earnest, bank stocks are already demonstrating the sector's long-term value as earnings beats and strong forward guidance aim to reinvigorate investor confidence. Imagine a bull market so powerful, every single investor became a millionaire. Not by finding the next NVIDIA or Bitcoin, but by owning a simple index fund.
It sounds impossible. Yet it happened – just a short time ago. Now a legendary figure says: "Brace yourselves. It's about to happen here, in America. But fair warning – it could be the worst thing that ever happens to you."
This story has received little coverage in the press. But if history repeats, it could bump tens of millions of Americans into a 7-figure net worth practically overnight. Click here for the full story. Such was the case when online bank Ally Financial (NYSE: ALLY) reported Q4 and full-year financials on Wednesday, Jan. 21. The market reacted positively, pushing shares nearly 7% higher. Ally Reports Record Q4 Earnings Growth Ally reported Q4 earnings of $1.09 per share, beating the consensus estimate of $1.02. Quarterly revenue was $2.17 billion, a 4.8% year-over-year increase and slightly above analyst expectations of $2.15 billion. For the full year 2025, Ally reported adjusted total net revenue of $8.5 billion and core pre-tax income of $1.6 billion. On the company's earnings call, CEO Michael Rhodes said the firm generated a record $1.5 billion in written insurance premiums and delivered year-over-year EPS growth of 62%—also a record. That EPS improvement was welcome after annualized earnings contractions of 38.8%, 44.9%, and 35.0% in 2022, 2023, and 2024, respectively. Ally attributed part of 2025's strong EPS growth to record consumer auto applications: 3.8 million in Q4, equating to $10.8 billion in loan originations. For the year, loan originations totaled about $43.7 billion, up 11% year over year. Additionally, the company authorized a $2 billion share buyback program and issued 2026 guidance that includes 5% revenue growth. Rhodes noted Ally "ended the year with $144 billion in retail deposit balances, reinforcing our position as the largest all-digital direct bank in the United States," and added that the bank "now serve[s] 3.5 million customers, as 2025 marked our 17th consecutive year of customer growth." With a trailing EPS of $1.66 and a trailing 12-month price-to-earnings (P/E) ratio of 25.52, analysts expect Ally Financial's earnings to grow about 53.22% next year, from $3.57 to $5.47 per share. Ally's Dividend Pays Investors to Patiently Wait for the Upside The average 12-month price target of $49.44 for ALLY implies nearly 17% potential upside. With a forward P/E of just 11.88, the stock looks increasingly like a value opportunity. As with most banks, Ally pays a dividend to patient shareholders. Currently, the dividend amounts to $1.20 annually, or about 2.83% based on today's price. While Ally's dividend payout ratio of roughly 72% may raise some concerns, the company has a five-year annualized dividend growth rate of 12.03%, which supports the payment's reliability. The next quarterly payment of $0.30 per share is scheduled to be paid on Tuesday, Feb. 17. The ex-dividend date is Monday, Feb. 2. What Wall Street Thinks About Ally Financial So far in January, Ally Financial has been upgraded by Evercore, Wells Fargo, and Bank of America to Outperform, Overweight, and Buy, respectively. Those firms cited improving credit trends and growing confidence in Ally's net interest margin—the difference between interest earned on loans and investments and interest paid on deposits and debt. Of the 18 analysts covering ALLY, 13 assign the stock a Buy rating, five a Hold, and none a Sell. Overall, it receives a Moderate Buy rating. According to TradeSmith, the stock's financial health has been in the Green Zone for more than three months. Meanwhile, institutional ownership remains above average at nearly 89%, with inflows of $2.46 billion outpacing outflows of $1.62 billion over the past 12 months. Current short interest stands at 3.5%, or just over 308,000 shares out of the 10.7 million shares outstanding. Notably, Ally Financial scores higher than 99% of the companies evaluated by MarketBeat and ranks 25th out of 907 stocks in the finance sector.
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