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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 $22.9 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.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and SYF perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the credit services industry. SYF's market leadership is fueled by its vast partner network, comprising national retailers, local merchants, and healthcare providers, paired with a robust digital platform. This digital focus aligns with consumer trends and enhances customer engagement.
Despite its notable strength, SYF shares have slipped 13.4% from their 52-week high of $70.93, achieved on Jan. 23. Over the past three months, SYF stock has gained 15.8%, outperforming the Nasdaq Composite’s ($NASX) 11.7% gains during the same time frame.
In the longer term, shares of SYF dipped 5.5% on a YTD basis, underperforming NASX’s YTD gains of 1.2%. However, the stock climbed 40.8% over the past 52 weeks, outperforming NASX’s 9.4% returns over the last year.
To confirm the bullish trend, SYF has been trading above its 200-day moving average since mid-May, with slight fluctuations. The stock is trading above its 50-day moving average since early May.
SYF is experiencing strong performance driven by interest on credit card balances and consumer loans. The Fed pausing rate cuts is expected to increase loan yields, boosting net interest income. In addition, strategic acquisitions and partnerships are driving digital transformation and product diversification, with rapid expansion of the CareCredit platform in healthcare and collaborations in the pet care market, showing strong growth potential. Moreover, partnerships with industry leaders like PayPal Holdings, Inc. (PYPL), Venmo, and Mastercard Incorporated (MA) have improved the customer payment experience.
On Apr. 22, SYF shares closed up more than 2% after reporting its Q1 results. Its EPS of$1.89 exceeded Wall Street expectations of $1.63. The company’s net interest income was $4.5 billion, falling short of Wall Street forecasts of $4.6 billion.
In the competitive arena of credit services, American Express Company (AXP) has taken the lead over SYF, showing resilience with a marginal downtick on a YTD basis but lagged behind the stock with 29.3% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on SYF’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts covering it, and the mean price target of $64.59 suggests a potential upside of 5.1% from current price 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.
