Analyst Mihir Bhatia of Bank of America Securities reiterated a Buy rating on Synchrony Financial, boosting the price target to $80.00.
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Mihir Bhatia’s rating is based on Synchrony Financial’s strong credit discipline and performance, which have exceeded pre-pandemic levels. Despite a challenging macroeconomic environment, Synchrony has managed to maintain lower provision expenses and better credit metrics, which contributed to a positive earnings surprise in the second quarter. The company’s focus on credit quality, even at the expense of slower short-term growth, is seen as a prudent strategy in the current economic climate.
Bhatia also notes that Synchrony’s loan growth is expected to stabilize as the company benefits from new partnerships and product expansions. Although the loan growth outlook has been adjusted to flat year-over-year, the net interest margin outlook remains strong and above consensus estimates. Despite some operational expense misses and a lowered top-line guidance, the overall credit performance and strategic focus on credit quality support the Buy rating.
In another report released today, Barclays also maintained a Buy rating on the stock with a $80.00 price target.
SYF’s price has also changed slightly for the past six months – from $70.490 to $70.660, which is a 0.24% increase.