Synchrony Financial SYF shares have declined 16.1% in the past month due to continued investor concerns about its credit quality and profitability. Broader macroeconomic factors also played their role, such as persistent inflation and increased financial pressures on consumers, leading to concerns about higher credit card delinquencies and defaults, especially among lower-income borrowers. The stockalso underperformed the industryand the S&P 500 Index. During this time, peers like American Express Company AXP and Capital One Financial Corporation COF witnessed declines, but to a lesser extent.
One-Month Price Performance: SYF, AXP, COF, Industry & S&P 500
Zacks Investment Research
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However, we believe the dip offers a massive buying opportunity, given SYF’s improving digital capabilitiesand expanding CareCredit platformand financial service offerings. Let’s delve deeper.
SYF’s Major Growth Drivers
Synchrony Financial is actively expanding through strategic acquisitions and partnerships, strengthening its digital capabilities and diversifying its offerings. Last year, the company acquired Ally Lending’s point-of-sale financing business, aligning with its multi-product strategy and enhancing its financial services portfolio. Collaborations with major players like PayPal, Venmo, J.Crew Group and Mastercard have further elevated the customer payment experience.
The company’s CareCredit platform continues to show strong growth, particularly in the healthcare sector, where Synchrony is expanding its network reach. Despite divesting Pets Best, Synchrony remains focused on the pet care market through partnerships with IPH, Thrive Pet Healthcare and others. Interest and fees on loans within its Health & Wellness sales platform increased 19.3% in 2022, 19.2% in 2023, and 13.6% in 2024, reflecting strong demand.
Synchrony Financial’s average active accounts have steadily grown over the past four years, with total period-end loan receivables rising nearly 2% year over year in 2024 to $104.7 billion. This momentum is expected to continue in 2025. Additionally, average interest-earning assets grew 8.7% in 2024, with further expansion anticipated in the coming years.
While some investors expressed concerns over the net charge-off rate rising to 6.31% in 2024, we expect a significant decline in 2025, particularly in the second half of the year. Given its loan portfolio breakdown, continued growth in credit cards, consumer installment loans and commercial credit products should drive higher interest income and reinforce Synchrony Financial’s performance.
SYF’s Earnings Estimates & Surprise History
The Zacks Consensus Estimate for 2025 adjusted earnings for Synchrony Financialis currently pegged at $7.68 per share, indicating 16.5% year-over-year growth. Over the past week, it has witnessed one upward estimate revision against no movement in the opposite direction. The consensus mark for 2026 earnings signals further 13.7% growth. The consensus estimate for 2025 and 2026 revenues suggests 3.5% and 5.7% year-over-year increases, respectively.
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SYF beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 2.8%.
SYF is trading comparatively cheap at the moment from a valuation standpoint. Its forward earnings multiple of 6.95X is lower than its five-year median of 7.64X and the industry average of 13.66X. The stock also looks attractively valued relative to peers like American Express and Capital One Financial, with forward 12-month P/E of 17.35X and 10.74X, respectively. Allstate now has a Value Score of A.
Zacks Investment Research
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Should You Buy SYF Stock Now?
Synchrony Financial’s rising active accounts and strategic alliances signal growth potential. The company’s focus on the CareCredit platform, the pet care market and improving loan portfolio position it well for the long term. Valuation metrics and optimistic earnings projections suggest it has more room to grow.
Its strengthening balance sheet provides a solid foundation for growth. As of the fourth quarter, total liquidity — including liquid assets and undrawn credit facilities — stood at $19.8 billion, representing 16.8% of total assets. Additionally, total debt to capital is at 48.3%, notably lower than the industry average of 54.9%.
SYF’s stock remains below Wall Street’s average price target of $78.10, suggesting a potential 42.67% upside from current levels.
Synchrony Wall Street Price Target
Zacks Investment Research
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With a blend of value, growth potential and digital capabilities enhancing efforts, Synchrony Financial currently presents an attractive investment opportunity. The company carries a Zacks Rank #2 (Buy) at present and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
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