Raymond James cuts Synovus stock rating to Market Perform

On Wednesday, Synovus Financial Corp (NYSE:SNV) experienced a shift in its stock rating as Raymond (NSE:RYMD) James analyst Michael Rose downgraded the bank’s shares from Outperform to Market Perform. The decision was influenced by potential earnings per share (EPS) downside risk associated with Synovus’ broad 2025 outlook. According to InvestingPro data, analysts project the company will remain profitable this year, with an EPS forecast of $4.79 for 2025. Additionally, there is a concern that the stock could be negatively impacted if industry credit fears resurface.

Synovus’ shares have seen a modest year-to-date underperformance, declining by 9.94%, compared to a 6.2% drop for the broader banking sector. The stock currently trades at a P/B ratio of 1.37x and offers a 3.41% dividend yield. Notably, InvestingPro analysis reveals that Synovus has maintained dividend payments for an impressive 52 consecutive years, demonstrating strong financial stability. Following this evaluation, Raymond James now views the risk-reward balance for Synovus as neutral.

The analyst’s commentary highlighted ongoing investments and growth opportunities within Synovus’ operations, particularly in its Southeastern markets. Despite the downgrade, the firm’s fundamental outlook on Synovus remains positive due to these factors.

Synovus Financial Corp is a financial services company with a strong presence in the Southeastern United States. The company’s stock performance and future prospects are closely monitored by investors and analysts alike, as changes in ratings can influence market behavior. Raymond James’ recent rating change reflects a cautious stance on the bank’s short-term performance amidst a broader industry context.

In other recent news, Synovus Financial has reported notable developments, particularly in its earnings and revenue performance. Raymond James has increased its price target for Synovus to $64, citing strong fourth-quarter 2024 earnings that exceeded expectations. The earnings per share were bolstered by a higher net interest margin and increased share repurchases. Similarly, Stephens highlighted Synovus’s operating earnings per share of $1.25, which surpassed both market consensus and their own projections, attributing the beat to higher net interest income and a favorable tax rate.

Furthermore, Goldman Sachs maintained a Neutral stance on Synovus, noting that the company’s quarterly results showed an increase in revenues and solid credit performance. The bank’s growth in revenues was largely driven by net interest income, which surpassed expectations due to non-recurring interest gains. In addition to strong earnings, Synovus announced a significant increase in capital returns, doubling market predictions with a $400 million return, a move well-received by investors.

Citi analysts have also expressed optimism, raising their price target to $62 and maintaining a Buy rating, driven by expectations of future earnings momentum and benefits from competitor consolidation. They noted Synovus’s favorable funding mix and lower-cost deposits as key factors in its growth narrative. Meanwhile, Synovus has introduced Carefull, a new service to combat financial fraud, particularly benefiting older adults, by monitoring accounts for signs of scams and financial errors. This initiative underscores Synovus’s commitment to enhancing client protection and financial security.

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