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Truist Securities raised its price target on Synchrony Financial (NYSE:SYF) stock to $68.00 from $63.00 on Friday, while maintaining a Hold rating on the consumer financial services company. The $23.39 billion market cap company currently trades at a P/E ratio of 8.38x, with analyst targets ranging from $48 to $88 per share. According to InvestingPro analysis, the stock appears fairly valued based on its proprietary Fair Value model.
The price target increase reflects Truist’s adjustments to earnings per share estimates, with 2025 and 2026 EPS forecasts rising by 1% and 2%, respectively. The firm cited recent monthly 8-K data showing improved credit metrics as a key factor in the revised outlook. InvestingPro data shows the company maintains a "GREAT" overall financial health score, with particularly strong metrics in profitability and price momentum.
Truist lowered its second-quarter receivables projection to $100 billion and reduced its net charge-off ratio forecast by 10 basis points to 6.0%. The firm expects the reserve ratio to remain largely steady from first-quarter levels, with lower reserve build requirements offsetting the impact of reduced loan balances.
The revenue sharing arrangement (RSA) to average loans ratio was adjusted upward by 10 basis points to 3.85% for the quarter, reflecting how improving loss trends flow through to the company’s partner arrangements.
Truist’s new price target is based on its 2026 EPS estimate of $8.65 and an 8x multiple, representing an $5 increase from its previous valuation of Synchrony shares.
In other recent news, Synchrony Financial reported strong first-quarter 2025 financial results, exceeding analysts’ expectations with an earnings per share of $1.89, surpassing the forecast of $1.67. The company also outperformed revenue projections, posting $4.46 billion against an anticipated $3.79 billion. Additionally, Synchrony has renewed partnerships with major brands like Sun Country Airlines and Ashley Furniture, contributing to its robust performance. In a strategic move, Synchrony regained its partnership with Walmart (NYSE:WMT) to issue credit cards through Walmart’s financial technology arm, OnePay, marking a significant return after previously holding the account for nearly two decades. This collaboration aims to enhance Synchrony’s presence in the retail credit market. Furthermore, Synchrony has partnered with Jewelers Mutual to offer integrated financing and insurance services to jewelry retailers, aiming to enhance customer purchasing experiences. Analysts from Citizens JMP noted that Synchrony is weathering the competitive pressures of the Buy Now/Pay Later market better than some of its counterparts, with a notable partnership with Lowe’s (NYSE:LOW). Despite the competitive landscape, analysts remain optimistic about Synchrony’s financial outlook while maintaining a neutral stance on its competitor, Bread Financial.
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