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Investing.com - Citizens has reiterated its Market Outperform rating on Synchrony Financial (NYSE:SYF) with an $88.00 price target, following the company’s third-quarter results. The target aligns with broader analyst sentiment, as InvestingPro data shows consensus targets ranging from $60 to $100, with the stock currently trading at an attractive P/E ratio of 7.8x.
Synchrony shares declined approximately 0.7% after the earnings release, underperforming the benchmark index which rose about 0.4%. The market reaction stemmed from investor concerns about the company’s plans to increase growth amid positive portfolio trends. Despite the daily dip, InvestingPro data reveals the stock has delivered an impressive 56.2% return over the past six months, with strong financial health metrics earning a "GREAT" overall rating.
Citizens highlighted that Synchrony’s successful shift toward a larger share of prime lending in recent years provides protection against potential stress facing nonprime consumers. The firm also noted stable credit performance from nonprime consumer balances currently on the company’s books. This strategic positioning has contributed to solid financial performance, with the company maintaining a 23% return on equity and generating $9.9 billion in levered free cash flow over the last twelve months.
According to Citizens, Synchrony management reported incrementally positive signs for discretionary spending and plans to moderately expand lending to lower credit bands. The company aims to recapture 30% of volumes lost during previous credit tightening measures.
The $88 price target represents approximately 10 times Citizens’ updated 2026 earnings per share estimate, reflecting a slight premium to Synchrony’s five-year average multiple. This premium is justified by the company’s differentiated partnerships, including the OnePay integration, which Citizens believes provides significant protection against Buy Now, Pay Later competition.
In other recent news, Synchrony Financial reported strong earnings for the third quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $2.86, significantly higher than the forecasted $2.21. Additionally, Synchrony Financial exceeded revenue projections, posting $3.82 billion compared to the anticipated $3.80 billion. These results highlight the company’s robust performance in the recent quarter. Despite the positive earnings and revenue figures, the stock experienced a pre-market decline. However, the focus remains on the company’s ability to outperform financial expectations. As these developments unfold, investors may look to analyst firms for further insights into Synchrony Financial’s future performance.
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