BofA update shows where active managers are putting money
On Tuesday, BofA Securities updated its outlook on Synchrony Financial (NYSE:SYF), increasing the price target to $85.00, up from the previous $82.00, while reaffirming a Buy rating on the stock. The adjustment follows Synchrony Financial’s fourth-quarter earnings release, which led to a decline in share price due to investor disappointment over the net revenue forecast. According to InvestingPro data, the company has demonstrated remarkable performance with an 80.6% return over the past year, and five analysts have recently revised their earnings estimates upward.
Despite shares of Synchrony Financial trading lower after the company’s fourth-quarter results, BofA Securities remains optimistic about the company’s future performance. The financial institution’s revenue projection for the upcoming year is in line with BofA’s and consensus estimates, which are $15.6 billion and $15.5 billion, respectively. Trading at a P/E ratio of 8.48 and with a market capitalization of $25.58 billion, the company appears attractively valued. InvestingPro subscribers can access detailed Fair Value analysis and 12 additional expert insights about Synchrony’s valuation metrics.
BofA Securities believes that the overall financial outlook for Synchrony Financial is positive, with expectations that the 2025 forecasts will be revised upwards. This anticipated adjustment is attributed to improvements in credit quality and expense management, which are likely to compensate for the modestly lower revenue projection. Additionally, Synchrony Financial has unique opportunities for revenue growth as more of its portfolio benefits from higher interest rates.
Credit quality is also showing signs of improvement, with year-over-year declines in delinquencies. This trend is another factor supporting BofA Securities’ decision to maintain a Buy rating for Synchrony Financial. The firm’s analysis suggests that despite the subdued revenue outlook, the company’s strategic financial management and potential for increased revenues position it favorably for the coming years.
In other recent news, Synchrony Financial has been making notable strides in the financial sector. The company reported robust Q4 earnings, exceeding analyst expectations with an adjusted earnings per share of $1.91, outpacing the consensus of $1.89. However, revenue for the quarter was slightly below the estimated $3.84 billion, coming in at $3.8 billion. Net earnings for the quarter saw a significant leap of 76% to $774 million, compared to $440 million in the same quarter of the previous year.
Goldman Sachs reaffirmed its Buy rating on Synchrony Financial with a steady price target of $82.00. Analyst Ryan Nash noted that the company’s net revenues did not meet expectations due to a slight miss in net interest income and higher rewards sharing agreements, despite expenses being better than anticipated.
In addition, Synchrony Financial reported several business achievements, including the addition or renewal of nearly 30 programs and extended collaborations with significant partners like Sam’s Club and JCPenney. These recent developments highlight the resilience and growth of Synchrony Financial.
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