On Wednesday, TD Cowen analysts increased the price target for Synchrony Financial (NYSE:SYF) shares to $80.00, up from the previous $75.00, while reiterating a Buy rating. The adjustment follows Synchrony Financial's fourth-quarter earnings report, in which the company posted earnings per share (EPS) of $1.91. This figure fell short of TD Cowen's expectation of $2.15 and was slightly below the consensus estimate of $1.93. According to InvestingPro, the stock has delivered an impressive 73.77% return over the past year, trading at a modest P/E ratio of 8.87. Current analyst targets suggest further upside potential, with the highest target at $88.
Synchrony Financial's fourth-quarter performance was deemed neutral by the analysts, noting that the lower EPS was primarily due to a smaller reserve drawdown. Nonetheless, this was balanced by a slightly improved outlook for 2025. The analysts highlighted that while their revenue estimate aligned with the mid-range of Synchrony's 2025 guidance, their credit loss projection was at the higher end, suggesting potential upside to the 2025 estimates. InvestingPro analysis reveals the company maintains a GREAT financial health score of 3.27, with particularly strong marks in profit and price momentum metrics. For deeper insights into Synchrony's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The report also mentioned the anticipation of declining losses in 2025 and a continued deceleration in delinquency formation. Synchrony Financial is expected to ease credit tightening in the second half of 2025 to foster growth and is committed to achieving operating leverage. If revenue reaches the upper end of the guidance, it would surpass both TD Cowen's and the consensus estimates for 2025.
In response to the earnings report and the company's guidance, TD Cowen adjusted their EPS estimates for Synchrony Financial for the years 2025 and 2026 to $7.20 and $8.20, respectively, up from their previous estimates of $6.64 and $7.81. The new price target of $80 is based on 10 times TD Cowen's 2026 EPS estimate for Synchrony Financial.
In other recent news, Synchrony Financial has been a focal point in the financial sector due to its recent earnings report and the subsequent reactions from major analyst firms. The company's fourth-quarter earnings exceeded analyst expectations, with an adjusted earnings per share of $1.91, surpassing the consensus of $1.89. However, the revenue for the quarter was slightly below the estimated $3.84 billion, coming in at $3.8 billion. Net earnings for the quarter saw a significant leap of 76% to $774 million, compared to $440 million in the same quarter of the previous year.
In response to these developments, BofA Securities increased its price target for Synchrony Financial to $85.00, up from the previous $82.00, while maintaining a Buy rating. Goldman Sachs also reaffirmed its Buy rating, maintaining a steady price target of $82.00. Both firms express optimism about the company's future performance despite a slight miss in revenue forecasts.
Synchrony Financial has also reported several business achievements, including the addition or renewal of nearly 30 programs and extended collaborations with significant partners like Sam's Club and JCPenney. These recent developments underline the resilience and growth potential of Synchrony Financial.
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