DA Davidson cuts Synovus stock target to $60, keeps Buy rating

On Monday, DA Davidson set a new price target for Synovus Financial (NYSE:SNV) shares, reducing it to $60.00 from the previous $65.00, but maintained a Buy rating on the stock. The firm’s analyst, Gary P. Tenner, provided insights into the bank’s first-quarter earnings, noting that Synovus had a solid start to the year 2025. According to InvestingPro data, the stock appears undervalued, with analyst targets ranging from $46 to $64, and 9 analysts have recently revised their earnings expectations upward for the upcoming period. Tenner highlighted that the Net Interest Income (NII) was at the higher end of expectations, accompanied by an expansion in the core Net Interest Margin (NIM) and well-managed operating expenses. The bank, currently valued at $5.57 billion by market capitalization, maintains a healthy P/E ratio of 11.36x, suggesting an attractive valuation relative to its near-term earnings growth potential.

The analyst also pointed out that while there were slight adjustments to the full-year guidance, they mainly pertained to lowering the upper limits of the balance sheet and revenue growth forecasts. Nevertheless, the Non-Interest Expense (NIE) outlook was mentioned as a positive factor that could balance these changes.

Synovus Financial’s first-quarter performance was characterized by strong financial metrics that suggest a robust foundation for the year ahead. The company’s ability to manage its expenses effectively while expanding its core NIM is indicative of a prudent financial strategy, as noted by DA Davidson’s analysis.

Despite the reduction in the growth outlook, the maintenance of a Buy rating by DA Davidson reflects confidence in Synovus Financial’s overall health and business trajectory. The firm’s emphasis on the bank’s NII and NIM, along with a controlled expense outlook, underscores the positive aspects of Synovus’ operations.

As the financial sector continues to navigate through various economic conditions, Synovus Financial’s position, as seen through the lens of DA Davidson’s latest assessment, suggests that the company remains a strong player with a clear strategy for maintaining its financial stability and growth. The bank’s commitment to shareholder returns is evidenced by its impressive 52-year streak of consecutive dividend payments, currently yielding 3.78%. InvestingPro analysis reveals several additional positive indicators about Synovus’s financial health, with an overall score of GOOD (2.52). For deeper insights into Synovus’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Synovus Financial reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.30, above the forecast of $1.12. The company also slightly exceeded revenue projections, reporting $570.9 million against a forecast of $569.42 million. Following this strong performance, BofA Securities raised the price target for Synovus to $60, maintaining a Buy rating, while DA Davidson reaffirmed a Buy rating with a $65 target. Stephens analyst Russel Gunther, however, lowered the price target to $46, maintaining an Equal Weight rating, citing adjustments in revenue and expense guidance.

Synovus demonstrated robust financial growth, with net interest income increasing by 8% year-over-year and a notable 16% rise in loan production quarter-over-quarter. The company’s net interest margin also expanded, surpassing forecasts with a rise of 9 basis points compared to BofA’s estimates. Despite a slight reduction in the upper range of its 2025 loan growth guidance, Synovus remains optimistic about its revenue momentum and credit metrics, as highlighted by DA Davidson.

The company anticipates stable net interest margins and adjusted revenue growth between 3-6%, despite potential economic challenges, including anticipated Federal Reserve rate cuts. Synovus’s management continues to focus on strategic hiring and expanding its structured lending team, reinforcing its growth trajectory and financial stability. These developments reflect a cautiously optimistic view of Synovus’s financial health and future prospects.

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