Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Synchrony Financial (SYF) Up 50.6% in 6 Months: More Room to Run?

By Zacks Investment ResearchStock MarketsDec 23, 2020 12:40AM ET
www.investing.com/analysis/synchrony-financial-syf-up-506-in-6-months-more-room-to-run-200548818
Synchrony Financial (SYF) Up 50.6% in 6 Months: More Room to Run?
By Zacks Investment Research   |  Dec 23, 2020 12:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Synchrony Financial (NYSE:SYF)'s SYF stock has been in investors’ good books on the back of the company’s restructuring plan and strategic growth initiatives.

The company has witnessed its 2020 and 2021 earnings estimate move north, reflecting investor's optimism on the stock.

In the past six months, shares of this currently Zacks Rank #3 (Hold) company have gained 50.6% against its industry’s decline of 5.8%.

Companies in the same space, such as Oaktree Specialty Lending (NASDAQ:OCSL) Corp. OCSL, Houlihan Lokey (NYSE:HLI) Inc. HLI and Alliance Data Systems Corporation (NYSE:ADS) ADS have also rallied 23.7%, 21% and 48.9%, respectively, in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This leading card issuer has been witnessing strong revenue growth for the past many years. Although it suffered to some extent in the first nine months of 2020, investments in the CareCredit network expansion, strategic initiatives and a ramp-up of digital capabilities might help it going forward.

The company’s CareCredit platform also holds ample growth potential. It is poised well for growth as the company added around 2,000 new provider locations to the network in the third quarter. Synchrony Financial recently tied up with RevSpring in a bid to facilitate seamless integration of the credit card application and payment option of CareCredit with RevSpring’s payment gateway PersonaPay.

Another segment of the company, Retail Card is a leading provider of private label credit cards and Dual Cards, general purpose co-branded credit cards and small and medium-sized business credit products. Although the same slid 1% in the first nine months of 2020, we expect the segment to perform well going forward. Digital sales penetration in the third quarter was 47% while digital applications accounted for 60% of the total. The segment benefited from spending on essential items like grocery, supplies, etc.

The company undertook restructuring plans to reduce its operating expenses and invested $89 million in the same. Management expects costs to decline by $150-$250 million for 2021, courtesy of this strategic action. It even estimates higher cost savings from this implementation post next year.

Inorganic growth has always been the company’s major growth trajectory. It frequently resorts to alliances and buyouts to enhance its capabilities and diversify its business profile. It added around 4000 merchants in the third quarter and expanded its several relationships.

Synchrony Financial tied up with several payment solutions partners and will continue forging relationships in 2021. It partnered with multiple biggies, such as PayPal and Venmo, which in turn, consistently transforms the payment experience for customers.

Despite the current economic volatility, the company returned $129 million in capital through common stock dividends.

Further Upside Left?

We believe that the company is well-poised for growth on the back of various initiatives.

The stock carries an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.

The Zacks Consensus Estimate for the company’s 2021 earnings indicates an improvement of 67% from the year-ago reported figure.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.

Click here for the 6 trades >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Alliance Data Systems Corporation (ADS): Free Stock Analysis Report

Synchrony Financial (SYF): Free Stock Analysis Report

Houlihan Lokey, Inc. (HLI): Free Stock Analysis Report

Oaktree Specialty Lending Corp. (OCSL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research
Synchrony Financial (SYF) Up 50.6% in 6 Months: More Room to Run?
 

Related Articles

Synchrony Financial (SYF) Up 50.6% in 6 Months: More Room to Run?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email