Synchrony shares undervalued due to ‘misperceptions,’ says Jefferies

Jefferies argues that aspects of Synchrony’s business model "may be less understood," including the composition and mix in its portfolio, the dynamics of retailer share agreements, and the mix of consumer discretionary versus non-discretionary spending, and the firm believes shares are undervalued, in par due to "some misperceptions." The firm has noticed a "common misbelief" that Synchrony’s credit book is, on average, non-prime, but in fact nearly 75% of the company’s loan receivables are with prime and super-prime consumers, the analyst tells investors. Jefferies maintains a Buy rating and $40 price target on Synchrony shares.