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Synchrony Financial (SYF)
:SYF
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Synchrony Financial
(NYSE:SYF)75Outperform
Positive Factors
Credit Trends
Credit improves sharply in January.
Financial Stability
Non-collectible obligations pressure eased compared to previous months, indicating improved financial stability.
Negative Factors
Revenue Performance
Synchrony's revenues fell below market expectations even as PPPCs (late fee mitigants) have rolled out as a 200-300bps pricing benefit on some.
Synchrony Financial (SYF) vs. S&P 500 (SPY)
Market Cap
$21.81B
Dividend Yield1.78%
Average Volume (3M)4.36M
Price to Earnings (P/E)6.6
Beta (1Y)1.18
Revenue Growth19.73%
EPS Growth65.57%
CountryUS
Employees20,000
SectorFinancial
Sector Strength93
IndustryCredit Finance
Share Statistics
EPS (TTM)8.53
Shares Outstanding388,749,480
10 Day Avg. Volume4,279,571
30 Day Avg. Volume4,360,556
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)N/A
Price to Sales (P/S)2.12
Price to Cash Flow (P/CF)2.30
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$78.71Price Target Upside40.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
Synchrony Financial Business Overview & Revenue Model
Company DescriptionSynchrony Financial engages in the provision of consumer financial services. It operates through three sales platforms: Retail Card, Payment Solutions, and CareCredit. The Retail Card platform is a provider of private label credit cards, and also provides Dual Cards and small-and medium-sized business credit products. The Payment Solutions platform is a provider of promotional financing for major consumer purchases, offering private label credit cards and instalment loans. The CareCredit platform is a provider of promotional financing to consumers for elective healthcare procedures or services, such as dental, veterinary, cosmetic, vision and audiology. The company was founded on September 12, 2003 and is headquartered in Stamford, CT.
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 consistent revenue growth, robust profitability, and a solid balance sheet. The company effectively manages its cash flows, supporting future growth and stability. Despite minor fluctuations in income metrics, the absence of debt and strong cash flows mitigate risks.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 | |||
| 22.64B | 7.66B | 16.00B | 10.19B | 11.16B | Gross Profit |
| 22.64B | 7.66B | 14.63B | 9.29B | 9.74B | EBIT |
| 21.18B | 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 | |||
| 14.71B | 14.26B | 10.29B | 8.34B | 11.52B | 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
Negative
55.84
Price Trends
65.22
Negative
63.36
Negative
54.97
Positive
Market Momentum
-2.55
Positive
26.38
Positive
15.56
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYF, the sentiment is Negative. The current price of 55.84 is below the 20-day moving average (MA) of 62.67, below the 50-day MA of 65.22, and above the 200-day MA of 54.97, indicating a neutral trend. The MACD of -2.55 indicates Positive momentum. The RSI at 26.38 is Positive, neither overbought nor oversold. The STOCH value of 15.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $21.81B | 6.56 | 22.96% | 1.78% | 19.73% | 65.57% | |
74 Outperform | $44.99B | 10.10 | 25.30% | 1.57% | 15.25% | 45.76% | |
73 Outperform | $136.34B | 12.17 | 6.04% | 3.05% | 8.20% | 49.26% | |
72 Outperform | $324.49B | 13.28 | 9.24% | 2.34% | 13.06% | 4.94% | |
72 Outperform | $70.51B | 15.96 | 7.81% | 1.30% | 9.06% | -3.02% | |
71 Outperform | $199.15B | 20.22 | 34.47% | 0.99% | 10.12% | 24.93% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
SYF
Synchrony Financial
55.84
15.37
37.98%
AXP
American Express
284.18
68.13
31.53%
BAC
Bank of America
42.29
7.51
21.59%
COF
Capital One Financial
185.95
52.22
39.05%
C
Citigroup
72.96
17.58
31.74%
DFS
Discover Financial Services
180.94
63.72
54.36%
Synchrony Financial Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -19.78% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
Synchrony Financial demonstrated strong new account growth, strategic partnerships, and impressive digital wallet expansion. However, growth in loan receivables was moderate due to consumer behavior and previous credit actions, and there was an increase in net charge-offs. The company's financial performance remains strong, but challenges in credit management persist.Highlights
Strong New Account Growth
Synchrony added 5 million new accounts in Q4 2024, contributing to a total of nearly 20 million new accounts for the year.
Robust Purchase Volume
The company generated $48 billion in purchase volume in Q4 2024, contributing to over $182 billion for the full year, marking the second highest level in company history.
Strategic Partnerships and Renewals
Synchrony added over 45 new partners in 2024, including Virgin, Gibson, and BRP, and renewed top partnerships like Sam's Club and JCPenney.
Digital Wallet Growth
Unique active wallet users grew 85% in 2024, doubling digital wallet sales and improving wallet penetration rate by over 200 basis points.
Strong Financial Performance
Full-year 2024 net earnings of $3.5 billion or $8.55 per diluted share, with a return on average assets of 2.9% and a return on tangible common equity of 27.5%.
Lowlights
Moderate Loan Receivable Growth
Ending loan receivables grew only 2% to $105 billion as customers prioritized non-discretionary spending.
Increased Net Charge-offs
Net charge-off rate increased to 6.45% in Q4 2024, 87 basis points higher than the previous year.
Impact of Credit Actions
Credit actions taken during mid-2023 and early 2024 led to reduced purchase volumes and new account growth.
Company Guidance
During Synchrony Financial's fourth quarter and full-year 2024 earnings call, the company highlighted several key performance metrics and strategic initiatives. Synchrony added 5 million new accounts and achieved $48 billion in purchase volume for the fourth quarter, with ending loan receivables growing by 2%. The company reported fourth-quarter net earnings of $774 million, or $1.91 per diluted share, with a return on average assets of 2.6% and a return on tangible common equity of 23%. For the full year, Synchrony acquired nearly 20 million new accounts and financed over $182 billion in purchase volume. Full-year net earnings were $3.5 billion, or $8.55 per diluted share, with a return on average assets of 2.9% and a return on tangible common equity of 27.5%. The company emphasized its strategic efforts in expanding partnerships, including renewals with Sam's Club and JCPenney, and highlighted the introduction of new products like Synchrony Pay Later. Additionally, Synchrony focused on enhancing its digital capabilities, reporting an 85% growth in unique active digital wallet users and over 600 million impressions from marketplace campaigns. As part of its forward-looking guidance, Synchrony anticipates low-single-digit growth in ending loan receivables for 2025, with net revenue projected between $15.2 and $15.7 billion, and a full-year net charge-off rate between 5.8% and 6.1%.Synchrony Financial Corporate Events
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.
Financial Disclosures
Synchrony Financial Reports Rising Delinquency and Charge-Off Rates
Negative
Dec 10, 2024
The company reports a year-over-year increase in the 30+ delinquency rate and net charge-off rate as of November 30, 2024, due to moderating customer payment rates. With monthly updates on these statistics, investors can better understand trends affecting loan receivables, crucial for assessing financial health and making informed investment decisions.
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.