Synchrony Financial Maintains Buy Rating Amidst Strong Loan Growth and Improved Delinquency Rates

In a report released today, Moshe Orenbuch from TD Cowen maintained a Buy rating on Synchrony Financial (SYF – Research Report), with a price target of $51.00.

Moshe Orenbuch has given his Buy rating due to a combination of factors that suggest a positive outlook for Synchrony Financial’s stock. One of the key considerations is the continued strong growth in loan balances, which, despite a slight sequential decrease, have grown substantially by 10.3% year-over-year in April. This growth is consistent with Orenbuch’s projections for the second quarter. Additionally, the delinquency rate, an important indicator of financial health, has shown improvement, coming in at 4.6%, which is a reduction from the previous month and aligns with levels seen before the pandemic.

Furthermore, while net charge-offs have increased marginally month-over-month, they remain within expected seasonal variations and are tracking in line with Orenbuch’s forecast for the second quarter. Notably, Synchrony Financial has not experienced the same degree of seasoning impact that has affected some of its peers, attributable in part to a more conservative strategy with account originations during the economic reopening. Also important is the sale of the higher loss Walmart portfolio in late 2019, which could be considered a strategic move to stabilize performance. These elements collectively underpin Orenbuch’s confidence in maintaining a Buy rating, as the fundamentals of Synchrony Financial appear robust and the company’s financial metrics are performing as anticipated.

Orenbuch covers the Financial sector, focusing on stocks such as Synchrony Financial, OneMain Holdings, and American Express. According to TipRanks, Orenbuch has an average return of 20.9% and a 68.25% success rate on recommended stocks.

In another report released on May 2, KBW also upgraded the stock to a Buy with a $62.00 price target.

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Synchrony Financial (SYF) Company Description:

Synchrony Financial engages in the provision of consumer financial services. It operates through three sales platforms: Retail Card, Payment Solutions, and CareCredit. The Retail Card platform is a provider of private label credit cards, and also provides Dual Cards and small-and medium-sized business credit products. The Payment Solutions platform is a provider of promotional financing for major consumer purchases, offering private label credit cards and instalment loans. The CareCredit platform is a provider of promotional financing to consumers for elective healthcare procedures or services, such as dental, veterinary, cosmetic, vision and audiology. The company was founded on September 12, 2003 and is headquartered in Stamford, CT.