The COVID-19-pandemic-induced remote working culture has amplified demand for digital transactions, thereby reducing foot traffic at financial institutions. This has benefited Synchrony Financial (NYSE:SYF)—the largest issuer of private label credit cards in the United States—immensely. A robust economic recovery this year is expected to increase demand for credit from SMEs across industries, especially retail. As such, SYF’s stock has surged 53.4% over the past six months. So read ahead to learn whether SYF can continue its ascent or if the stock is due for a retreat.The fintech (financial technology) industry is transforming the global financial sector, with the volume of digital payments accelerating since the onset of the COVID-19 pandemic. It was no surprise that fintech stocks were among the top performers in 2020. The digitization of major service industries has been triggering a rapid adoption of remote financial transactions, a trend from which major players in the fintech space are benefiting.
A case in point is Connecticut-based consumer financial services company Synchrony Financial (SYF). SYF was spun off from GE Capital in 2014 with an original focus on credit cards for retailers. It provides back-end financial services for many store-branded credit cards. However, the company has since expanded and delivers a wide range of specialized financing programs as well as innovative consumer banking products across key industries that include digital, retail, home, auto, travel, health and pet.
Shares of SYF registered a 2% intraday gain yesterday to close the session at $47.70. The stock has surged 37.4% so far this year versus the broader market S&P 500’s 11.7% gains. In fact, SYF has returned 17.1% over the past month alone.