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Stamford, Connecticut-based Synchrony Financial (SYF) is a premier consumer financial services company delivering one of the industry's most complete digitally-enabled product suites. Valued at $26 billion by market cap, the company provides a range of credit products such as credit cards, commercial credit products, and consumer installment loans through programs established with a diverse group of national and regional retailers, local merchants, manufacturers, and more. The consumer credit company is expected to announce its fiscal fourth-quarter earnings for 2024 on Tuesday, Jan. 28.
Ahead of the event, analysts expect SYF to report a profit of $1.88 per share on a diluted basis, up 82.5% from $1.03 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing the forecast on another occasion.
For the full year, analysts expect SYF to report EPS of $6.51, up 25.4% from $5.19 in fiscal 2023. Its EPS is expected to rise 1.1% year over year to $6.58 in fiscal 2025.
SYF stock has outperformed the S&P 500’s ($SPX) 26.3% gains over the past 52 weeks, with shares up 78.3% during this period. Similarly, it outperformed the Financial Select Sector SPDR Fund’s (XLF) 29.8 gains over the same time frame.
SYF’s outperformance can be due to a growing loan receivables portfolio, a favorable labor market, higher interest and fees on loans, and improved payment rates. Additionally, it has gained momentum through its partnership with Albertsons Companies, Inc. (ACI), expanding its health & wellness platform, through CareCredit usage. Moreover, the increasing adoption of dual and co-branded cards has enhanced its product utility and customer satisfaction.
On Oct. 16, SYF shares closed up more than 6% after reporting its Q3 results. Its EPS of $1.94 surpassed Wall Street expectations of $1.77. The company’s net interest income was $4.6 billion, topping Wall Street forecasts of $4.5 billion.
Analysts’ consensus opinion on SYF stock is moderately bullish, with a “Moderate Buy” rating overall. Out of 21 analysts covering the stock, 14 advise a “Strong Buy” rating, one suggests a “Moderate Buy,” and six give a “Hold.” SYF’s average analyst price target is $72.47, indicating a potential upside of 8.5% from the current levels.
