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1. Company Snapshot

1.a. Company Description

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States.It provides credit products, such as credit cards, commercial credit products, and consumer installment loans.The company also offers private label credit cards, dual cards, co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts to retail and commercial customers, as well as accepts deposits through third-party securities brokerage firms.


In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; healthcare payments and financing solutions under the CareCredit, Pets Best, and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries; and point-of-sale consumer financing for audiology products and dental services.The company offers its credit products through programs established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations, and healthcare service providers; and deposit products through various channels, such as digital and print.It serves digital, health and wellness, retail, home, auto, powersports, jewelry, pets, and other industries.


Synchrony Financial was founded in 1932 and is headquartered in Stamford, Connecticut.

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1.b. Last Insights on SYF

Synchrony Financial's recent performance was negatively impacted by mixed Q4 results, with analysts slashing their forecasts following the earnings release. Despite beating estimates with $2.18 per share, concerns surrounding declining active accounts and average interest-earning assets cloud earnings upside. Additionally, some investors, such as Massachusetts Financial Services Co. MA and Asset Management One Co. Ltd., have sold shares, reducing their stakes by 0.8% and 5.5%, respectively. A restructuring charge of $0.14 also affected Q4 earnings.

1.c. Company Highlights

2. Synchrony Financial's Q3 Earnings: A Strong Performance

Synchrony Financial reported a robust third-quarter performance, with net earnings of $1.1 billion, or $2.86 per diluted share, beating analyst estimates of $2.22. The company's net revenue was flat versus last year at $3.8 billion, with a net interest margin of 15.62%, a 58 basis point increase. The return on average assets was 3.6%, and the return on tangible common equity was 30.6%. The company's financial performance was driven by a 2% year-over-year increase in purchase volume to $46 billion.

Publication Date: Oct -16

📋 Highlights
  • Net Earnings Surge: $1.1 billion ($2.86/share) net earnings with 3.6% ROAA and 30.6% ROTCE, driven by 3.4% higher customer spend frequency and $46B purchase volume (2% YoY growth).
  • Strong Credit Metrics: 30+ delinquency rate at 4.39% (vs. pre-pandemic) and net charge-offs of 5.16%, enabling a $451M decrease in credit loss provision to $1.1 billion.
  • Strategic Expansion: Added 15+ partners (Toro, Lowe’s, Dental Intelligence) and acquired Versatile Credit, boosting portfolio diversification and financing capabilities.
  • Capital Returns: $971 million returned to shareholders via share repurchases and dividends, with $2.1B remaining in share repurchase authorization.

Credit Performance

The company's credit performance was strong, with a 30-plus delinquency rate of 4.39% and a net charge-off rate of 5.16%. The provision for credit losses decreased by $451 million to $1.1 billion, driven by a decrease in net charge-offs and a reserve release. The company's credit metrics are trending favorably, with non-prime payment rates being strong and delinquencies improving.

Growth Prospects

Synchrony Financial is optimistic about its growth prospects, driven by a strong pipeline of potential portfolio acquisitions and new de novo programs. The recent acquisition of Versatile Credit is expected to enhance the company's capabilities and drive growth. The company's Walmart card program is a top priority, with a strong value proposition and technologically advanced platform. The success of Pay Later at Amazon has reinforced the company's strategy of offering multiple products, including Pay Later, revolving credit products, and installment loans.

Valuation

Synchrony Financial's valuation metrics are attractive, with a Price-to-Tangible Book Value (P/TBV) ratio of 1.59 and a Dividend Yield of 1.52%. The company's Return on Equity (ROE) is 21.29%, indicating strong profitability. Analysts estimate next year's revenue growth at 4.0%, which suggests that the company's growth prospects are promising.

Guidance

For the full year 2025, Synchrony expects flat ending receivables, a loss rate between 5.6-5.7%, and RSAs between 3.95-4.05% of receivables. The company expects net revenue between $15 billion and $15.1 billion and an efficiency ratio between 33-33.5%. The guidance suggests that the company is well-positioned to drive long-term value for stakeholders.

3. NewsRoom

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Synchrony to Participate in the 2026 UBS Financial Services Conference

13:00

Source: prnewswire.com

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Finward Bancorp (NASDAQ:FNWD) and Synchrony Financial (NYSE:SYF) Head to Head Analysis

Feb -01

Source: defenseworld.net

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Federated Hermes Inc. Raises Holdings in Synchrony Financial $SYF

Jan -30

Source: defenseworld.net

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Synchrony Financial $SYF Shares Sold by AustralianSuper Pty Ltd

Jan -29

Source: defenseworld.net

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Synchrony Financial Analysts Slash Their Forecasts Following Q4 Earnings

Jan -28

Source: benzinga.com

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Synchrony Financial: Growth At A Cost

Jan -28

Source: seekingalpha.com

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Hussman Strategic Advisors Inc. Decreases Stock Position in Synchrony Financial $SYF

Jan -28

Source: defenseworld.net

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Synchrony Financial (SYF) Q4 2025 Earnings Call Transcript

Jan -27

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.40%)

6. Segments

Thrift / Savings and Loan Institutions

Expected Growth: 8.0%

The increasing demand for community-based banking and the growing popularity of digital banking services will contribute to the segment's growth, driven by Synchrony's strategic partnerships and innovative product offerings.

7. Detailed Products

CareCredit

A credit card designed for health and wellness expenses, offering promotional financing options for medical, dental, and veterinary care.

Synchrony Bank Deposits

A range of deposit products, including CDs, IRAs, and savings accounts, offering competitive rates and online banking capabilities.

Synchrony Credit Cards

A suite of credit cards, including cashback, rewards, and low-interest cards, offered through partnerships with retailers and merchants.

Payment Solutions

Customized payment plans and financing options for businesses, enabling customers to pay for goods and services over time.

Digital Platforms

A range of digital platforms and tools, including online banking, mobile apps, and APIs, enabling seamless customer experiences.

8. Synchrony Financial's Porter Forces

Forces Ranking

Threat Of Substitutes

Synchrony Financial operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand recognition and diversified product offerings mitigate the threat of substitutes.

Bargaining Power Of Customers

Synchrony Financial's customers are primarily individual consumers and small businesses, which have limited bargaining power. The company's large customer base and diversified product offerings also reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Synchrony Financial's suppliers are primarily technology and infrastructure providers, which have limited bargaining power. The company's large scale of operations and diversified supplier base also reduce the bargaining power of individual suppliers.

Threat Of New Entrants

The financial services industry has high barriers to entry, including regulatory requirements and significant capital investments. Additionally, Synchrony Financial's strong brand recognition and established relationships with partners create a high barrier to entry for new entrants.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. Synchrony Financial faces intense competition from traditional banks, fintech companies, and other financial institutions, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.24%
Debt Cost 11.79%
Equity Weight 40.76%
Equity Cost 11.79%
WACC 11.79%
Leverage 145.34%

11. Quality Control: Synchrony Financial passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Synchrony

A-Score: 6.8/10

Value: 7.8

Growth: 7.8

Quality: 7.6

Yield: 4.0

Momentum: 7.0

Volatility: 6.7

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OneMain Holdings

A-Score: 6.6/10

Value: 5.5

Growth: 5.4

Quality: 5.2

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

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FirstCash

A-Score: 6.3/10

Value: 4.1

Growth: 7.6

Quality: 6.4

Yield: 2.0

Momentum: 9.5

Volatility: 8.0

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SLM

A-Score: 6.1/10

Value: 7.1

Growth: 5.6

Quality: 6.8

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

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Western Union

A-Score: 6.0/10

Value: 7.4

Growth: 3.1

Quality: 6.2

Yield: 10.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Ally Financial

A-Score: 5.6/10

Value: 6.6

Growth: 5.1

Quality: 3.1

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.18$

Current Price

74.18$

Potential

-0.00%

Expected Cash-Flows