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1. Company Snapshot

1.a. Company Description

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States.It provides credit products, such as credit cards, commercial credit products, and consumer installment loans.The company also offers private label credit cards, dual cards, co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts to retail and commercial customers, as well as accepts deposits through third-party securities brokerage firms.


In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; healthcare payments and financing solutions under the CareCredit, Pets Best, and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries; and point-of-sale consumer financing for audiology products and dental services.The company offers its credit products through programs established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations, and healthcare service providers; and deposit products through various channels, such as digital and print.It serves digital, health and wellness, retail, home, auto, powersports, jewelry, pets, and other industries.


Synchrony Financial was founded in 1932 and is headquartered in Stamford, Connecticut.

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1.b. Last Insights on SYF

Synchrony Financial's recent performance was negatively impacted by mixed Q4 results, with analysts slashing their forecasts following the earnings release. Despite beating estimates with $2.18 per share, concerns surrounding declining active accounts and average interest-earning assets cloud earnings upside. Additionally, some investors, such as Massachusetts Financial Services Co. MA and Asset Management One Co. Ltd., have sold shares, reducing their stakes by 0.8% and 5.5%, respectively. A restructuring charge of $0.14 also affected Q4 earnings.

1.c. Company Highlights

2. Synchrony Financial's Strong Q4 2025 Earnings Report

Synchrony Financial reported a strong fourth quarter 2025 performance, with net earnings of $751 million, or $2.40 per diluted share, beating analyst estimates of $2.01. Net interest income increased 4% to $4.8 billion, driven by higher loan receivables yield and product pricing and policy changes. The company's net interest margin expanded 82 basis points to 15.83%, reflecting a 53 basis point increase in loan receivables yield.

Publication Date: Feb -04

📋 Highlights
  • Q4 Net Earnings:: $751 million or $2.40 per diluted share, driven by strong performance and $49 billion purchase volume (3% YoY increase).
  • Co-Branded Card Growth:: Dual/co-branded cards accounted for 50% of purchase volume, up 16% YoY, fueled by product upgrades and higher spend.
  • Credit Metrics:: Net charge-off rate returned to 5.5%-6% target range, with 21.8% return on tangible common equity and 2.5% ROA.
  • Shareholder Returns:: $1.1 billion returned in Q4 via $952 million share repurchases and $106 million dividends.
  • 2026 Guidance:: EPS projected at $9.10–$9.50, with mid-single-digit receivables growth and stable net charge-off rates (5.5%-6%).

Revenue Growth and Credit Performance

The company generated $49 billion in purchase volume, a 3% year-over-year increase, with digital platform purchase volume growing 6%. Dual and co-branded cards accounted for 50% of total purchase volume, increasing 16% versus last year. Synchrony added over 20 million new accounts in 2025 and delivered strong credit results, with a net charge-off rate returning within its long-term target range of 5.5% to 6%.

Outlook and Guidance

For 2026, Synchrony expects mid-single-digit ending receivables growth, driven by average active account and purchase volume growth. Net earnings per diluted share are expected to be between $9.10 and $9.50. The company is executing on its strategic priorities to grow and win new partners, diversify its programs, products, and markets, and deliver best-in-class experiences.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of 1.58 and a Dividend Yield of 1.56%, Synchrony's valuation appears reasonable. The company's Net Interest Margin (NIM) of 15.83% is a strong indicator of its profitability. Analysts estimate revenue growth at 5.1% for next year, and the actual EPS of $2.18 beat estimates, indicating a positive surprise.

Key Drivers and Risks

The company's growth is driven by its multi-product strategy, including pay later, and its strong partnership with Walmart. However, risks include potential headwinds from late fees and investment portfolio yields. Synchrony's capital position remains strong, with a CET1 ratio of 12.6% and a Total Capital Ratio of 15.8%.

3. NewsRoom

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Curtis Howse Sells 52,556 Shares of Synchrony Financial (NYSE:SYF) Stock

Feb -06

Source: defenseworld.net

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Synchrony to Participate in the 2026 UBS Financial Services Conference

Feb -03

Source: prnewswire.com

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Finward Bancorp (NASDAQ:FNWD) and Synchrony Financial (NYSE:SYF) Head to Head Analysis

Feb -01

Source: defenseworld.net

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Federated Hermes Inc. Raises Holdings in Synchrony Financial $SYF

Jan -30

Source: defenseworld.net

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Synchrony Financial $SYF Shares Sold by AustralianSuper Pty Ltd

Jan -29

Source: defenseworld.net

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Synchrony Financial Analysts Slash Their Forecasts Following Q4 Earnings

Jan -28

Source: benzinga.com

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Synchrony Financial: Growth At A Cost

Jan -28

Source: seekingalpha.com

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Hussman Strategic Advisors Inc. Decreases Stock Position in Synchrony Financial $SYF

Jan -28

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.40%)

6. Segments

Thrift / Savings and Loan Institutions

Expected Growth: 8.0%

The increasing demand for community-based banking and the growing popularity of digital banking services will contribute to the segment's growth, driven by Synchrony's strategic partnerships and innovative product offerings.

7. Detailed Products

CareCredit

A credit card designed for health and wellness expenses, offering promotional financing options for medical, dental, and veterinary care.

Synchrony Bank Deposits

A range of deposit products, including CDs, IRAs, and savings accounts, offering competitive rates and online banking capabilities.

Synchrony Credit Cards

A suite of credit cards, including cashback, rewards, and low-interest cards, offered through partnerships with retailers and merchants.

Payment Solutions

Customized payment plans and financing options for businesses, enabling customers to pay for goods and services over time.

Digital Platforms

A range of digital platforms and tools, including online banking, mobile apps, and APIs, enabling seamless customer experiences.

8. Synchrony Financial's Porter Forces

Forces Ranking

Threat Of Substitutes

Synchrony Financial operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand recognition and diversified product offerings mitigate the threat of substitutes.

Bargaining Power Of Customers

Synchrony Financial's customers are primarily individual consumers and small businesses, which have limited bargaining power. The company's large customer base and diversified product offerings also reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Synchrony Financial's suppliers are primarily technology and infrastructure providers, which have limited bargaining power. The company's large scale of operations and diversified supplier base also reduce the bargaining power of individual suppliers.

Threat Of New Entrants

The financial services industry has high barriers to entry, including regulatory requirements and significant capital investments. Additionally, Synchrony Financial's strong brand recognition and established relationships with partners create a high barrier to entry for new entrants.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. Synchrony Financial faces intense competition from traditional banks, fintech companies, and other financial institutions, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.24%
Debt Cost 11.79%
Equity Weight 40.76%
Equity Cost 11.79%
WACC 11.79%
Leverage 145.34%

11. Quality Control: Synchrony Financial passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Synchrony

A-Score: 6.8/10

Value: 7.8

Growth: 7.8

Quality: 7.6

Yield: 4.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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OneMain Holdings

A-Score: 6.6/10

Value: 5.5

Growth: 5.4

Quality: 5.2

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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FirstCash

A-Score: 6.3/10

Value: 4.1

Growth: 7.6

Quality: 6.4

Yield: 2.0

Momentum: 9.5

Volatility: 8.0

1-Year Total Return ->

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SLM

A-Score: 6.1/10

Value: 7.1

Growth: 5.6

Quality: 6.8

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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Western Union

A-Score: 6.0/10

Value: 7.4

Growth: 3.1

Quality: 6.2

Yield: 10.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Ally Financial

A-Score: 5.6/10

Value: 6.6

Growth: 5.1

Quality: 3.1

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

75.16$

Current Price

75.16$

Potential

-0.00%

Expected Cash-Flows