Synchrony Financial: Buy Rating Reaffirmed as Near-Term Expense Pressures Mask Attractive Valuation and 2026 Earnings Power

In a report released today, Vincent Caintic from BTIG maintained a Buy rating on Synchrony Financial, with a price target of $96.00.

Vincent Caintic has given his Buy rating due to a combination of factors tied to both valuation and fundamentals. He believes the recent 6% pullback after management’s 2026 outlook is excessive, noting that Synchrony now trades at a modest earnings multiple relative to its earnings guidance and historically stable credit performance. In his view, the selloff overlooks the company’s resilient credit trends and the improving net interest margin expected in 2026, even accounting for some mix shift into slightly lower-yielding products. He also highlights that tax refund season should provide an earnings tailwind that is already embedded in management’s forecast.

Caintic acknowledges that 2026 will be a transition year with higher costs as Synchrony invests to capture growth from new and expanded partnerships with retailers and e‑commerce platforms, but he sees these investments as laying the groundwork for accelerating loan growth visible from the second quarter of 2026. He expects that as these growth initiatives ramp, revenue will scale faster than expenses, allowing the company to move back toward its long‑term efficiency ratio target in the low‑30% range. With an estimated return on tangible common equity around the mid‑20s and a target price that implies a higher, yet still reasonable, multiple of earnings and tangible book value, he views the current share price as an attractive entry point. Overall, he concludes that the risk‑reward is favorable for investors willing to look through the near‑term expense pressure to the medium‑term earnings power.

In another report released today, Compass Point also upgraded the stock to a Buy with a $96.00 price target.