Synchrony Financial Poised for Strong Q4 Earnings Report
Analysts Anticipate Notable Growth in Profits and Continued Stock Performance
Stamford, Connecticut-based Synchrony Financial (SYF) stands as a leading consumer financial services provider, offering a comprehensive range of digitally-enabled products. With a market capitalization of $26 billion, the company specializes in various credit products, including credit cards, commercial credit options, and consumer installment loans, partnering with a wide array of national and regional retailers, local merchants, and manufacturers. SYF is expected to reveal its fiscal fourth-quarter earnings for 2024 on Tuesday, Jan. 28.
Analysts predict that SYF will report earnings of $1.88 per share on a diluted basis, reflecting a significant increase of 82.5% compared to $1.03 per share from the same quarter last year. In recent quarters, the company has exceeded consensus estimates three times while falling short once.
For the entire fiscal year, expectations point to an EPS of $6.51, marking a 25.4% growth from $5.19 in fiscal 2023. Looking forward, EPS is projected to rise slightly to $6.58 in fiscal 2025, indicating a year-over-year increase of 1.1%.
Over the past year, SYF’s stock has achieved remarkable success, outperforming the S&P 500’s ($SPX) 26.3% gains with a rise of 78.3%. Additionally, it surpassed the Financial Select Sector SPDR Fund’s (XLF) gain of 29.8% during the same timeframe.
The impressive performance of SYF can be attributed to several factors, such as a growing portfolio of loan receivables, a positive labor market, increased interest and fees on loans, and improved payment rates. Further momentum comes from its collaboration with Albertsons Companies, Inc. (ACI), which has expanded its health & wellness platform through increased CareCredit usage. Moreover, the rising popularity of dual and co-branded cards has boosted product utility and customer satisfaction.
On Oct. 16, SYF shares saw a rise of more than 6% following the announcement of its Q3 results. The reported EPS of $1.94 exceeded Wall Street’s expectations of $1.77, while net interest income reached $4.6 billion, surpassing forecasts of $4.5 billion.
Analysts hold a moderately bullish stance on SYF stock, reflected in a “Moderate Buy” overall rating. Among the 21 analysts assessing the stock, 14 recommend a “Strong Buy,” one advises a “Moderate Buy,” and six suggest a “Hold.” The average analyst price target stands at $72.47, indicating a potential upside of 8.5% from current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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