U.S. Consumer Finance Post callback notes: SYF & ALLY

Research evidence excerpt

U.S. Consumer Finance Post callback notes: SYF & ALLY

Valuation Method and Risk Statement

SYF: We arrive at our price targets by applying target P/E multiples to our '26/27 EPS

estimates, which is weighted 50%, and target P/TBV multiples to our YE26/27E TBV

estimates, which is also weighted 50%. Primary industry risks include: 1) lower deposit levels

due to decreased liquidity levels in the financial system from Fed quantitative tightening,

leading to increased funding costs and/or lower levels of asset growth due to funding

constraints; 2) a potential recession, driving credit deterioration and an industry-wide

downshift in loan demand; 3) the potential for rate cuts by the Fed in response to recessionary

pressures, leading to net interest margin pressure/reduced NII levels going forward; and 4) a

more rigorous regulatory environment that could lead to, heightened oversight, greater

capital requirements, and in turn lower capital returns to shareholders.

ALLY: Our price target is derived by applying a target P/E multiple on our 2027 EPS estimate

(weighted 50%) and a target P/TBVPS multiple on our 2026 TBVPS estimate (weighted 50%).

Downside risks include: 1) lower deposit levels due to decreased liquidity levels in the financial

system from Fed quantitative tightening, leading to increased funding costs and/or lower

levels of asset growth due to funding constraints; 2) a potential recession, driving credit

deterioration and an industry-wide downshift in loan demand; 3) the potential for rate cuts

by the Fed in response to recessionary pressures, leading to net interest margin pressure/

reduced NII levels going forward; and 4) a more rigorous regulatory environment that could

lead to, heightened oversight, greater capital requirements, and in turn lower capital returns