BUZZ-US consumer finance industry's outlook improves as Fed to cut rates, Morgan Stanley says
Morgan Stanley has upgraded its outlook for the US consumer finance industry from "cautious" to "in-line," raising price targets by a median of 13%. The firm identifies Ally Financial as the best investment opportunity, anticipating a 48 basis point increase in Net Interest Margin by Q4 2027. UWM Holdings was downgraded to "equal-weight" due to valuation risks. While a modest recovery in loan growth is expected in 2026, banks remain cautious about macroeconomic conditions. Year-to-date, Ally is up 10.22% and UWM is up 3.49%.
Brokerage Morgan Stanley upgrades US consumer finance industry outlook to “in-line” from “cautious”
Lifts price targets by a median of 13%
Says Ally Financial (ALLY.N) is the best way for consumers to profit from rate cuts, due to expected expansion of Net Interest Margin by 48 basis points by Q4 2027
Downgraded UWM Holdings (UWMC.N) to “equal-weight” as MS feels the company faces valuation risks if long-term rates don’t follow Fed cuts
Brokerage expects modest recovery in loan growth in 2026, but banks remain cautious about the macroeconomic conditions
The sector could do well if loans grow and companies return extra cash, but it’s safer to pick strong individual stocks, says Morgan Stanley
ALLY up 10.22% YTD, including session’s move, while UWMC up 3.49% YTD
