Baird has decided to withdraw its Fresh Pick status from Synchrony (SYF, Financial) after the stock's notable performance. However, the firm continues to endorse the stock with a positive outlook. Baird upholds its Outperform rating and sets a price target of $75 on Synchrony shares.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Synchrony Financial (SYF, Financial) is $62.14 with a high estimate of $88.00 and a low estimate of $42.00. The average target implies an upside of 2.94% from the current price of $60.36. More detailed estimate data can be found on the Synchrony Financial (SYF) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Synchrony Financial's (SYF, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Synchrony Financial (SYF, Financial) in one year is $67.51, suggesting a upside of 11.85% from the current price of $60.36. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Synchrony Financial (SYF) Summary page.
SYF Key Business Developments
Release Date: April 22, 2025
- Net Earnings: $757 million or $1.89 per diluted share.
- Return on Average Assets: 2.5%.
- Return on Tangible Common Equity: 22.4%.
- Purchase Volume: $41 billion, down 4% year over year.
- Ending Loan Receivables: Decreased 2% to $100 billion.
- Revenue: Decreased 23% to $3.7 billion.
- Net Interest Margin: 14.74%, increased 19 basis points year over year.
- Provision for Credit Losses: Decreased to $1.5 billion.
- Other Expenses: Increased 3% to $1.2 billion.
- Efficiency Ratio: 33.4%, approximately 110 basis points higher than last year.
- 30+ Delinquency Rate: 4.52%, a decline of 22 basis points from the prior year.
- Net Charge Off Rate: 6.38%, an increase of 7 basis points from the prior year.
- Allowance for Credit Losses: 10.87% of loan receivables.
- Capital Ratios: CET1 ratio of 13.2%, Tier 1 capital ratio of 14.4%, Total capital ratio of 16.5%.
- Share Repurchase Authorization: New authorization of $2.5 billion for the period ending June 30, 2026.
- Quarterly Dividend: Increased by 20% to $0.30 per common share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Synchrony Financial (SYF, Financial) reported strong financial performance in Q1 2025 with net earnings of $757 million, or $1.89 per diluted share.
- The company 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 during the quarter.
- The company added or renewed more than 10 partners, including notable names like Sun Country Airlines and American Eagle Outfitters.
- Synchrony Financial was named the number two Best Company to Work For in the US by Fortune Magazine, highlighting its strong corporate culture.
Negative Points
- Purchase volume decreased by 4% year over year, impacted by previous credit actions and selective customer spending behavior.
- Ending loan receivables decreased by 2% to $100 billion due to lower purchase volume.
- Revenue decreased by 23% to $3.7 billion, primarily due to the impact of the Pets Best gain on sale in the prior year.
- The company's liquidity portfolio yield declined by 88 basis points, reflecting the impact of lower benchmark rates.
- Provision for credit losses decreased, but the allowance for credit losses as a percent of loan receivables increased to 10.87%.
