SYF: Shareholder Returns Will Remain Supported As Credit Quality Stabilizes

The analyst price target for Synchrony Financial increased slightly from $82.57 to $82.74, as analysts cited ongoing improvements in revenue growth and credit performance as key reasons for their optimism.

Analyst Commentary

Recent Street research provides a broad view on Synchrony Financial, with analysts noting both strengths and areas of caution as they adjust their ratings and price targets following the company's Q3 report and subsequent developments.

• Bullish analysts continue to increase price targets, reflecting expectations for resilient revenue growth and benign credit performance in the near term.
• Improving spending trends and new business initiatives, particularly involving major retail partnerships, are viewed as catalysts that could accelerate loan growth next year.
• The unwinding of prior credit actions, combined with additional share buybacks, is seen as supporting higher fiscal 2027 projections and sustaining shareholder returns.
• Recent strong performance in credit metrics through August has led to incremental confidence in ongoing credit quality, which reduces perceived downside risks.

• Bearish analysts express concern that certain consumer finance companies, including Synchrony, may face a relatively lower position in the payment hierarchy. This could potentially limit pricing power and growth trajectory.
• Persistent caution remains around elevated delinquency trends. Some analysts project a more challenging environment relative to general purpose credit card issuers.
• Macroeconomic uncertainties, especially regarding sustained high interest rates and mixed signals in consumer health, temper some optimism and could create volatility in performance metrics.

What's in the News

• Deutsche Bank raised Synchrony's price target to $93 from $91 and maintained a Buy rating following the Q3 report. The firm expressed confidence in the company's revenue growth and stable credit performance, according to a Deutsche Bank research note.
• Synchrony and The Toro Company launched a new credit card program that aims to provide innovative financing solutions for Toro, Exmark, Spartan, and Z Turf Equipment dealers. The program features digital applications, special financing options, and advanced underwriting tools.
• From July 1, 2025 to September 30, 2025, Synchrony repurchased 12.1 million shares for $861.1 million and completed its buyback program announced in April 2025, further supporting shareholder returns.
• Synchrony reported net charge-offs for Q3 2025 totaling $1,298 million, a reduction from $1,553 million in the same period last year.
• Synchrony expanded its partnerships in health and wellness financing by collaborating with leading organizations to enhance offerings for veterinary and hearing care. This includes new agreements with Pumpkin Pet Insurance, mClub, and Audibel.

Valuation Changes

• Fair Value: Increased slightly from $82.57 to $82.74. This indicates a marginal uptick in analysts' intrinsic value estimates.
• Discount Rate: Decreased modestly from 9.12% to 9.05%, which suggests a slightly lower risk premium being applied to future cash flows.
• Revenue Growth: Edged down marginally from 19.83% to 19.81%. This reflects a minor adjustment in growth projections.
• Net Profit Margin: Improved fractionally from 17.88% to 17.90%. This signals a small enhancement in profitability expectations.
• Future P/E: Dipped insignificantly from 10.45x to 10.45x, denoting virtually unchanged expectations for forward earnings multiples.