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Synchrony Financial (SYF)
NYSE:SYF

Synchrony Financial (SYF) AI Stock Analysis

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Synchrony Financial

(NYSE:SYF)

Rating:77Outperform
Price Target:
$70.00
▲(13.91%Upside)
The strong financial performance and undervalued valuation are the most significant factors driving the score. Technical indicators support a bullish outlook, while the earnings call and corporate events provide additional confidence in future prospects. The high debt level is a risk to monitor.
Positive Factors
Credit Management
The May net charge-off rate was significantly lower than both monthly and yearly averages, showcasing effective credit management.
Financial Performance
Analyst believes SYF’s pricing actions will lead to enhanced near-term earnings power.
Strategic Partnerships
The strategic partnership with OnePay to issue a new Walmart credit card program is expected to boost organic loan growth and enhance financial performance.
Negative Factors
Loan Growth
Loan growth remains weak due to tighter underwriting, which may limit the company's expansion potential.
Partnership Risks
Walmart is viewed as being tough on their vendors, raising questions about what will prevent Synchrony from facing the same issues that Capital One had with the relationship.

Synchrony Financial (SYF) vs. SPDR S&P 500 ETF (SPY)

Synchrony Financial Business Overview & Revenue Model

Company DescriptionSynchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans. The company also offers private label credit cards, dual cards, co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts to retail and commercial customers, as well as accepts deposits through third-party securities brokerage firms. In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; healthcare payments and financing solutions under the CareCredit, Pets Best, and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries; and point-of-sale consumer financing for audiology products and dental services. The company offers its credit products through programs established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations, and healthcare service providers; and deposit products through various channels, such as digital and print. It serves digital, health and wellness, retail, home, auto, powersports, jewelry, pets, and other industries. Synchrony Financial was founded in 1932 and is headquartered in Stamford, Connecticut.
How the Company Makes MoneySynchrony Financial makes money primarily through its retail credit card and promotional financing services. The company generates revenue from interest income on credit card loans and fees charged to merchants and cardholders. These fees include interchange fees, late fees, and annual fees. Synchrony also earns interest from its savings products, such as deposit accounts, which are part of its consumer banking operations. Key partnerships with major retailers and service providers enable Synchrony to expand its customer base and enhance its revenue streams. Additionally, the company leverages data analytics to optimize its credit offerings and manage risk, further contributing to its profitability.

Synchrony Financial Earnings Call Summary

Earnings Call Date:Apr 22, 2025
(Q1-2025)
|
% Change Since: 30.83%|
Next Earnings Date:Jul 22, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance with strong financial metrics and successful partnership renewals on the positive side. However, there were declines in purchase volume and net revenue, influenced by economic uncertainty and previous credit actions.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Synchrony delivered net earnings of $757 million or $1.89 per diluted share, a return on average assets of 2.5%, and a return on tangible common equity of 22.4% in the first quarter of 2025.
Purchase Volume
Synchrony generated $41 billion of purchase volume in Q1 2025. Dual and co-branded cards accounted for 45% of total purchase volume for the quarter and increased by 2%.
Partnership Renewals and Additions
Synchrony added or renewed more than 10 partners, including Texas A&M Veterinary Hospital, Ashley, Discount Tire, and American Eagle, strengthening its partner pipeline.
Recognition as a Top Workplace
Synchrony was named as the Number 2 Best Company to Work for in the U.S. by Fortune Magazine and Great Places to Work.
Negative Updates
Decline in Purchase Volume and Receivables
Purchase volume was down 4% year-over-year, and ending loan receivables decreased 2% to $100 billion in the first quarter.
Net Revenue Decrease
Net revenue decreased 23% to $3.7 billion, primarily reflecting the impact of the Pets Best gain on sale in the prior year.
Credit and Economic Challenges
Year-over-year trends in both active accounts and purchase volume were impacted by previous credit actions and continued moderation in customer spend due to economic uncertainty.
Company Guidance
During the Synchrony Financial First Quarter 2025 Earnings Conference Call, the company reported strong financial performance, including net earnings of $757 million, or $1.89 per diluted share. They achieved a return on average assets of 2.5% and a return on tangible common equity of 22.4%. Synchrony engaged with approximately 70 million customers and generated $41 billion in purchase volume. Dual and co-branded cards accounted for 45% of total purchase volume, which increased by 2%. Despite a 2% year-over-year decline in ending receivables, the payment rate remained flat compared to last year, with a sequential increase of 10 basis points. The company continued to monitor customer behavior closely, noting that customers are managing their spending amidst economic uncertainties. Synchrony added or renewed more than ten partners, including Ashley, Discount Tire, and American Eagle, and highlighted the success of the CareCredit dual card and a new co-brand program with Sun Country Airlines. The company's commitment to innovation and flexible financing was emphasized, and it was noted that Synchrony was named the Number 2 Best Company to Work for in the U.S. by Fortune Magazine.

Synchrony Financial Financial Statement Overview

Summary
Synchrony Financial shows a strong financial position with robust revenue growth and profitability. The company manages a healthy cash flow, though it faces high debt levels, which necessitate careful management to ensure sustainable growth.
Income Statement
75
Positive
Synchrony Financial demonstrates strong gross profit margins and a consistent increase in total revenue, indicating healthy revenue growth. The net profit margin shows some volatility but remains robust, signaling profitability. However, the EBIT margin has shown slight fluctuations, reflecting operational costs that need monitoring.
Balance Sheet
68
Positive
The company's debt-to-equity ratio is moderately high, reflecting a substantial reliance on debt financing, which could pose risks in volatile market conditions. However, the return on equity is commendable, indicating effective use of equity to generate profits. The equity ratio suggests a solid capital structure with sufficient equity backing.
Cash Flow
70
Positive
Operating cash flow is strong, supporting net income effectively, and the company maintains a healthy free cash flow. While free cash flow growth has been inconsistent, the overall cash flow position remains solid, providing flexibility for future investments and debt repayment.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
18.05B9.39B7.66B16.00B10.19B11.16B
Gross Profit
14.45B9.39B7.66B14.63B9.29B9.74B
EBIT
10.17B5.26B3.66B5.44B5.50B1.80B
EBITDA
2.41B0.000.004.89B6.36B2.84B
Net Income Common Stockholders
2.96B3.50B2.24B3.02B4.22B1.39B
Balance SheetCash, Cash Equivalents and Short-Term Investments
24.35B17.79B18.06B15.17B13.62B18.99B
Total Assets
122.03B119.46B117.48B104.56B95.75B95.95B
Total Debt
17.01B15.46B15.98B14.19B14.51B15.78B
Net Debt
-4.62B751.00M1.72B3.90B6.17B4.25B
Total Liabilities
105.44B102.88B103.58B91.69B82.09B83.25B
Stockholders Equity
16.58B16.58B13.90B12.87B13.65B12.70B
Cash FlowFree Cash Flow
9.80B9.85B8.59B6.69B7.10B7.49B
Operating Cash Flow
9.80B9.85B8.59B6.69B7.10B7.49B
Investing Cash Flow
-6.10B-8.90B-14.23B-10.23B-4.81B-498.00M
Financing Cash Flow
-1.10B-611.00M9.63B5.28B-5.20B-8.03B

Synchrony Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price61.45
Price Trends
50DMA
55.28
Positive
100DMA
56.88
Positive
200DMA
57.87
Positive
Market Momentum
MACD
1.35
Positive
RSI
60.04
Neutral
STOCH
71.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYF, the sentiment is Positive. The current price of 61.45 is above the 20-day moving average (MA) of 59.20, above the 50-day MA of 55.28, and above the 200-day MA of 57.87, indicating a bullish trend. The MACD of 1.35 indicates Positive momentum. The RSI at 60.04 is Neutral, neither overbought nor oversold. The STOCH value of 71.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SYF.

Synchrony Financial Risk Analysis

Synchrony Financial disclosed 36 risk factors in its most recent earnings report. Synchrony Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Note 3. Acquisitions and dispositions Q4, 2024
2.
Note 17. Segment reporting Q4, 2024
3.
Index to consolidated financial statements Q4, 2024

Synchrony Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DFDFS
78
Outperform
$50.34B10.6928.29%1.40%9.42%128.55%
SYSYF
77
Outperform
$23.39B8.4418.60%1.95%1.22%4.96%
73
Outperform
$16.98B36.507.51%21.24%
IXIX
69
Neutral
$23.01B10.568.65%2.83%0.31%34.40%
OMOMF
68
Neutral
$6.25B11.1217.46%7.75%9.07%
64
Neutral
$12.77B9.787.84%78.83%12.06%-7.99%
63
Neutral
$11.32B27.073.84%3.26%-2.99%-43.64%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SYF
Synchrony Financial
61.45
17.38
39.44%
DFS
Discover Financial Services
200.05
73.89
58.57%
IX
Orix
21.31
-0.16
-0.75%
ALLY
Ally Financial
36.84
-2.25
-5.76%
OMF
OneMain Holdings
53.68
8.54
18.92%
SOFI
SoFi Technologies
15.36
9.04
143.04%

Synchrony Financial Corporate Events

Financial Disclosures
Synchrony Financial Releases May 2025 Charge-Off Data
Neutral
Jun 10, 2025

Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending May 31, 2025. The company plans to continue providing these statistics monthly, aligning quarterly figures with financial results announcements. This transparency in reporting could impact stakeholders by offering consistent insights into the company’s financial health and operational performance.

The most recent analyst rating on (SYF) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Synchrony Financial stock, see the SYF Stock Forecast page.

Product-Related AnnouncementsBusiness Operations and Strategy
Synchrony Financial Partners with OnePay for Walmart Credit Card
Positive
Jun 9, 2025

On June 9, 2025, Synchrony Financial announced a strategic partnership with OnePay to launch a new credit card program with Walmart, expected to go live in fall 2025. This program will allow Synchrony to become the exclusive issuer of OnePay credit cards at Walmart, integrating the credit card experience within the OnePay app and leveraging Mastercard’s global payments network. The initiative aims to enhance consumer experience by providing a transparent, rewarding, and easy-to-use financial service, expected to drive loyalty and sales with attractive risk-adjusted returns, contributing positively to Synchrony’s long-term financial performance.

The most recent analyst rating on (SYF) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Synchrony Financial stock, see the SYF Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Synchrony Financial Releases April 2025 Charge-Off Data
Neutral
May 15, 2025

Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending April 30, 2025. The company plans to continue providing these statistics monthly, aligning quarterly updates with financial results announcements. This initiative reflects Synchrony Financial’s commitment to transparency and could impact stakeholders by offering insights into the company’s financial health and operational performance over time.

The most recent analyst rating on (SYF) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Synchrony Financial stock, see the SYF Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Synchrony Financial Releases March 2025 Charge-Off Data
Neutral
Apr 22, 2025

Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending March 31, 2025. The company plans to continue providing these statistics on a monthly basis, aligning the release of quarterly statistics with their financial results announcements. This initiative aims to enhance transparency in financial reporting and provide stakeholders with timely insights into the company’s financial health.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.