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Synchrony Financial (SYF)
NYSE:SYF
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Synchrony Financial
(NYSE:SYF)
74Outperform
Positive Factors
Credit Performance
Management's commentary was viewed positively, particularly due to lower-than-estimated charge-offs and the expectation of accelerating growth in the second half of the year.
Earnings
The company reported earnings per share significantly above expectations.
Shareholder Returns
A healthy $2.5 billion share buyback has been announced, along with a 20% dividend hike.
Negative Factors
Loan Growth
Loan growth has slowed, similar to direct peers.
Macroeconomic Concerns
A key risk for Synchrony Financial is macroeconomic uncertainty or an increase in unemployment.
Purchase Volume
Purchase volumes were slightly lower than expected, and net interest margin missed forecasts due to excess liquidity.
Synchrony Financial (SYF) vs. S&P 500 (SPY)
Market Cap
$19.57B
Dividend Yield1.94%
Average Volume (3M)5.49M
Price to Earnings (P/E)7.1
Beta (1Y)1.31
Revenue Growth1.22%
EPS Growth4.96%
CountryUS
Employees20,000
SectorFinancial
Sector Strength84
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)7.28
Shares Outstanding380,650,700
10 Day Avg. Volume5,061,714
30 Day Avg. Volume5,491,690
Financial Highlights & Ratios
PEG Ratio1.42
Price to Book (P/B)N/A
Price to Sales (P/S)1.08
Price to Cash Flow (P/CF)2.20
P/FCF Ratio1.80
Enterprise Value/Market Cap0.88
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.04
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$66.36Price Target Upside29.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Synchrony Financial Business Overview & Revenue Model
Company DescriptionSynchrony Financial (SYF) is a premier consumer financial services company headquartered in the United States. It specializes in offering a wide range of credit products, including private label credit cards, dual cards, and consumer installment loans. The company partners with retailers, healthcare providers, manufacturers, and other entities to provide customized financial solutions that enhance consumer purchasing power and foster brand loyalty.
How the Company Makes MoneySynchrony Financial primarily generates revenue through interest income earned from its credit products. The company's key revenue streams include interest on outstanding credit card balances, fees charged on credit card transactions, and merchant fees from retail partners. Synchrony's strategic partnerships with major retailers and service providers allow it to leverage their customer bases to drive credit card usage and increase transaction volumes. Additionally, the company benefits from cross-selling opportunities with its partners, enhancing its revenue through value-added services such as promotional financing and loyalty programs.
Synchrony Financial Financial Statement Overview
Summary
Synchrony Financial demonstrates strong financial health with growing revenues, robust profitability, and a solid balance sheet. The absence of debt and strong cash flows mitigate risks, positioning the company well in the credit finance industry.Income Statement
Synchrony Financial's income statement shows strong financial performance with consistent revenue growth from $7.66 billion to $22.64 billion in the most recent year. The gross profit margin remains stable as the company reports high EBIT margins, though the absence of EBITDA figures suggests potential volatility in operating costs. Net profit margin and revenue growth are commendable, demonstrating robust profitability and expansion.72
Positive
Balance Sheet
The balance sheet reflects a healthy financial position with no total debt in the most recent year, enhancing stability. The company has a solid equity base, and the return on equity is strong, reflecting efficient use of equity. The equity ratio has improved, indicating a better capital structure and reduced financial risk.80
Positive
Cash Flow
Cash flow analysis highlights strong operating cash flow relative to net income, indicating effective cash management. Free cash flow has grown significantly, suggesting robust cash generation capability. The free cash flow to net income ratio is favorable, indicating potential for reinvestment and shareholder returns.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 9.39B | 7.66B | 16.00B | 10.19B | 11.16B | Gross Profit |
| 16.63B | 7.66B | 14.63B | 9.29B | 9.74B | EBIT |
| 5.26B | 3.66B | 5.44B | 5.50B | 1.80B | EBITDA |
| 0.00 | 0.00 | 4.89B | 6.36B | 2.84B | Net Income Common Stockholders |
| 3.50B | 2.24B | 3.02B | 4.22B | 1.39B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 17.79B | 18.06B | 15.17B | 13.62B | 18.99B | Total Assets |
| 119.46B | 117.48B | 104.56B | 95.75B | 95.95B | Total Debt |
| 15.46B | 15.98B | 14.19B | 14.51B | 15.78B | Net Debt |
| 751.00M | 1.72B | 3.90B | 6.17B | 4.25B | Total Liabilities |
| 102.88B | 103.58B | 91.69B | 82.09B | 83.25B | Stockholders Equity |
| 16.58B | 13.90B | 12.87B | 13.65B | 12.70B |
| Cash Flow | Free Cash Flow | |||
| 9.85B | 8.59B | 6.69B | 7.10B | 7.49B | Operating Cash Flow |
| 9.85B | 8.59B | 6.69B | 7.10B | 7.49B | Investing Cash Flow |
| -8.90B | -14.23B | -10.23B | -4.81B | -498.00M | Financing Cash Flow |
| -611.00M | 9.63B | 5.28B | -5.20B | -8.03B |
Synchrony Financial Technical Analysis
Neutral
51.42
Price Trends
53.82
Negative
60.36
Negative
56.27
Negative
Market Momentum
-1.13
Negative
52.34
Neutral
76.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYF, the sentiment is Neutral. The current price of 51.42 is above the 20-day moving average (MA) of 48.70, below the 50-day MA of 53.82, and below the 200-day MA of 56.27, indicating a neutral trend. The MACD of -1.13 indicates Negative momentum. The RSI at 52.34 is Neutral, neither overbought nor oversold. The STOCH value of 76.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 0 New Risks
Synchrony Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $46.51B | 9.88 | 28.31% | 1.51% | 9.42% | 128.55% | |
74 Outperform | $19.57B | 7.06 | 18.60% | 1.94% | 1.22% | 4.96% | |
69 Neutral | $21.74B | 8.72 | 10.07% | 3.27% | 0.31% | 34.40% | |
69 Neutral | $9.77B | 17.68 | 3.84% | 3.65% | -2.90% | -43.64% | |
69 Neutral | $5.15B | 10.18 | 15.96% | 8.53% | 7.96% | -20.11% | |
63 Neutral | $14.22B | 33.71 | 8.26% | ― | 29.33% | ― | |
63 Neutral | $12.31B | 9.55 | 7.88% | 79.24% | 12.71% | -4.71% |
* Financial Sector Average
Performance Comparison
SYF
Synchrony Financial
51.42
7.57
17.26%
DFS
Discover Financial Services
184.86
59.19
47.10%
IX
Orix
20.00
-0.40
-1.96%
ALLY
Ally Financial
32.92
-5.06
-13.32%
OMF
OneMain Holdings
48.79
1.87
3.99%
SOFI
SoFi Technologies
12.88
5.84
82.95%
Synchrony Financial Earnings Call Summary
Earnings Call Date:Apr 22, 2025
(Q1-2025)
| % Change Since: 8.87%|
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 Corporate Events
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.
Spark’s Take on SYF Stock
According to Spark, TipRanks’ AI Analyst, SYF is a Outperform.
Synchrony Financial scores well due to strong financial performance and an attractive valuation. While technical indicators suggest some caution due to bearish trends, the company’s strategic growth and partnerships, coupled with a solid dividend yield, make it a compelling investment in the credit services sector.
To see Spark’s full report on SYF stock, click here.
Financial Disclosures
Synchrony Financial Releases January 2025 Charge-Off Data
Neutral
Feb 10, 2025
Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending January 31, 2025. The company plans to continue providing these statistics each month, highlighting trends in its financial performance that could impact stakeholders and reflect its operational focus on maintaining transparency.
Financial Disclosures
Synchrony Financial Releases Charge-Off and Delinquency Data
Neutral
Jan 28, 2025
Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending December 31, 2024. The data shows that the 30+ delinquency rate remained flat year-over-year, attributed to credit actions, while the net charge-off rate increased due to moderation in customer payment rates and additional charge-off cycles. This release is part of a regular monthly update, with statistics for the last month of each calendar quarter coinciding with financial results announcements.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.