Synchrony Financial (NYSE:SYF) is one of the stocks Jim Cramer highlighted recently. Cramer mentioned that he prefers another company. He remarked: “Then up next is Synchrony Financial. That’s a credit card issuer, which has retired 7% of its shares per year. Tempting? No, because, see, I prefer Capital One, which said this very day that it’s stepping up its share repurchasing this quarter.” Photo by Adam Nowakowski on Unsplash Synchrony Financial (NYSE:SYF) provides consumer financial services, inclu ...

Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Synchrony (SYF) and Blackstone Inc. (BX) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings es ...

Question-and-Answer SessionGreat. Let's jump right into it. Maybe we'll start off with an update on the third quarter. How has the consumer spend been trending so far this quarter? You had noted improving momentum in the second quarter on purchase volumes. Has that persisted? And what sales platforms are you seeing the best growth in right now?Brian WenzelExecutive VP & CFO Yes. Thanks for the question, Terry. So when we look at what we said back in July, right, we saw some green shoots really in certain ca ...

Synchrony Financial (NYSE:SYF) FY Conference September 10, 2025 07:30 AM ET Company ParticipantsBrian Wenzel - EVP & CFOConference Call ParticipantsTerry Ma - Senior Equity Research AnalystTerry MaAlright. Good morning, everyone. Thank you for joining first presentation of the day. My name is Terry Muck. I'm a consumer finance here at Barclays.I'm very pleased to have on stage Brian Wenzel, c o CFO of Synchrony Financial. So welcome, Brian.Brian WenzelTerry, thank you. Glad to be here today.Terry MaGreat. L ...

Once again, Energy and Financials dominate the value landscape, underlining persistent market skepticism about the durability of cash flows in these sectors.From Petrobras (PBR), trading at an Acquirer’s Multiple (AM) of 4.0 with a stunning 36.8% free cash flow yield, to Bank of New York Mellon (BK) at just 1.8 AM with steady buybacks and dividends, the case for energy and finance remains compelling.Second-Tier Strength: Finance and EnergyThe Finance sector continues to stand out. Synchrony Financial (SYF) ...

Market Overview - U.S. equity markets experienced modest gains in August 2025, with the S&P 500 increasing by 2.2%, marking its fourth consecutive month of growth, driven by investor optimism regarding potential interest rate cuts and strong corporate earnings despite ongoing inflation and tariff concerns [1][9] Financial Services Sector Performance - The Financial Services sector saw significant investor optimism, with the KBW Nasdaq Bank Index and S&P Banks Select Industry Index rising by 5.5% and 8.3%, respectively, fueled by AI momentum, digital advertising strength, and expectations of a Fed rate cut [2][6] - Stronger-than-expected earnings reports and positive guidance from major financial institutions contributed to the bullish sentiment, alongside a rebound in capital markets activity [7][9] Key Financial Services Stocks - Assurant, Inc. (AIZ) is focusing on growing fee-based capital-light businesses, which currently account for 52% of its segmental revenues, with management projecting double-digit growth in this area over the long term [8][10] - Synchrony Financial (SYF) is leveraging its strong distribution channels and has expanded its offerings through acquisitions and partnerships, although it anticipates a decline in net revenues for 2025 due to higher Retailer Share Arrangements and lower loan receivables [14][16] - American Express Company (AXP) benefits from its dual role as a credit card issuer and network operator, with a projected revenue increase of 8-10% for 2025, despite exposure to credit risk from macroeconomic challenges [18][21] - Fifth Third Bancorp (FITB) is expanding its non-interest income base through strategic partnerships and acquisitions, with plans to open 50-60 new branches annually in high-growth regions from 2025 to 2028 [23][24] - Citizens Financial Group, Inc. (CFG) is executing a long-term growth strategy focused on wealth management and market expansion, with a new private bank initiative expected to raise $7 billion in deposits by 2024 [27][30]

Key Takeaways Synchrony is expanding its portfolio across dental, veterinary, audiology and general wellness.Health & Wellness receivables hit 15% of loans, with more than 285,000 providers.Repeat customers drive purchase volume, while diversification limits reliance on any single partner.Consumer financial services giant Synchrony Financial (SYF) is steadily strengthening its footprint in the Health & Wellness space through its CareCredit brand, a move that could power sustained expansion in the years ahea ...

Core Insights - Capital One (COF) and Synchrony Financial (SYF) are significant players in the U.S. financial services sector, focusing on credit card and consumer lending, generating revenue primarily from interest income, transaction fees, and customer spending [1][2] Group 1: Company Strategies - COF targets consumer and small business segments with a traditional banking approach, while SYF focuses more on retail and commercial customers [2] - COF's acquisition of Discover Financial Services for $35 billion in May 2025 positioned it as the largest U.S. credit card issuer by balances, enhancing its payment network capabilities [5][10] - SYF has been growing through acquisitions and partnerships, including the acquisition of Ally Financial's point-of-sale financing business in 2024 [17][18] Group 2: Financial Performance - Over the past three months, COF and SYF stocks have increased by 17.7% and 29.2%, respectively, despite facing pressures from inflation and higher interest rates [3] - COF's revenue showed a five-year CAGR of 6.5% from 2019 to 2024, while net loans held for investment recorded a CAGR of 4.3% during the same period [8] - SYF's revenues experienced a five-year CAGR of 2.6% (ended 2024), but the trend reversed in the first half of 2025 [20] Group 3: Future Outlook - Analysts project COF's revenues to grow by 34.1% and 18.5% in 2025 and 2026, respectively, with earnings expected to rise by 19.1% and 13.7% [24] - SYF's revenue growth is anticipated to be more modest, with projections of 3.1% and 5% for 2025 and 2026, respectively, while earnings are expected to surge by 25.6% and 9.7% [24] Group 4: Valuation and Comparison - COF is trading at a forward P/E of 12.51X, higher than its five-year median of 9.04X, while SYF is trading at a trailing P/TB of 8.56X, also above its five-year median of 7.45X [26] - SYF has a higher return on equity (ROE) of 21.35% compared to COF's 10.01%, indicating more efficient use of shareholder funds [28] - SYF's dividend yield of 1.59% is slightly higher than COF's 1.07%, reflecting lower growth opportunities for SYF [29] Group 5: Investment Recommendation - Given the current macroeconomic challenges, both companies are taking steps to navigate the environment, but COF's recent acquisition and growth trajectory make it a more favorable investment option compared to SYF [31][33]

Core Viewpoint - Synchrony Financial is significantly enhancing its partnerships and expanding its Buy Now, Pay Later (BNPL) offerings, which is expected to drive revenue and attract new customers [1][3][4] Group 1: Partnerships and Product Offerings - Synchrony has renewed its partnership with Walmart, launching a new credit card program through collaboration with FinTech OnePay, which includes both general-purpose and private-label cards [3][4] - The company has introduced "Synchrony Pay Later" at Amazon, allowing customers to split purchases of $50 or more into installment payments, further extending its relationship with Amazon [4] - Synchrony’s alliance with PayPal now includes a physical PayPal Credit card, enabling BNPL options for everyday purchases and promotional financing [4][11] Group 2: Consumer Behavior and Market Insights - Synchrony’s CFO noted that consumers are becoming more discerning rather than pulling back on spending, particularly in big-ticket discretionary purchases [3][10] - The company tracks discretionary spending in real-time across 62 million active accounts, observing a positive trend in ticket sizes for clothing, cosmetics, and dining after three negative quarters [10] - There is a focus on attracting higher-income households, with Walmart targeting those earning $100,000 or more, which aligns with Synchrony’s new card offerings [8] Group 3: In-Store BNPL Adoption Challenges - Despite the growth in BNPL, in-store adoption remains a challenge, with BNPL purchases accounting for only 7.4% of in-store transactions during Black Friday [7] - Synchrony is confident that its retail expertise will enhance in-store adoption of BNPL options, especially with senior executives at Walmart and OnePay focused on this area [7] Group 4: CareCredit and Growth Segments - Synchrony’s CareCredit business is its fastest-growing vertical, providing promotional financing at 266,000 medical, dental, and veterinary locations, capitalizing on the emotional bond with consumers [12] - The company is expanding CareCredit into high-cost specialties, such as fertility and behavioral health, where traditional credit cards may be maxed out [12] Group 5: Investor Sentiment and Future Outlook - Investors are focused on themes related to consumer credit, growth recovery, and the significance of Synchrony’s partnerships with Amazon, Walmart, and PayPal [13] - The company aims to demonstrate that disciplined underwriting and deep merchant integrations can coexist, indicating a robust market for private-label and cobranded cards [13]

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of Synchrony Financial's financial performance, condition, liquidity, and capital for the reporting period [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=6&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Synchrony Financial's Q2 2025 net earnings increased to $967 million due to lower credit loss provisions, alongside improved credit quality and key partnership extensions Q2 & Six-Month 2025 vs 2024 Performance Highlights | Metric | Q2 2025 | Q2 2024 | Change | 6M 2025 | 6M 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Earnings** | $967M | $643M | +50.4% | $1.7B | $1.9B | -10.5% | | **Loan Receivables (Period-End)** | $99.8B | $102.3B | -2.5% | $99.8B | $102.3B | -2.5% | | **Net Interest Income** | $4.5B | $4.4B | +2.6% | $9.0B | $8.8B | +2.0% | | **Provision for Credit Losses** | $1,146M | $1,691M | -32.2% | $2,637M | $3,575M | -26.2% | | **Net Charge-off Rate** | 5.70% | 6.42% | -72 bps | 6.04% | 6.37% | -33 bps | | **30+ Day Delinquency Rate** | 4.18% | 4.47% | -29 bps | 4.18% | 4.47% | -29 bps | [Introduction and Business Overview](index=6&type=section&id=Introduction%20and%20Business%20Overview) Synchrony is a consumer financial services company managing $99.8 billion in loan receivables across five sales platforms, with credit cards comprising 92.2% of its portfolio - The company operates through **five sales platforms**: Home & Auto, Digital, Diversified & Value, Health & Wellness, and Lifestyle[21](index=21&type=chunk) Credit Product Mix as of June 30, 2025 | Credit Product | Standard Terms Only | Deferred Interest | Other Promotional | Total | | :--- | :--- | :--- | :--- | :--- | | **Credit cards** | 61.4% | 18.0% | 12.8% | **92.2%** | | **Commercial credit products** | 2.0% | — | — | **2.0%** | | **Consumer installment loans** | — | 0.2% | 5.5% | **5.7%** | | **Other** | 0.1% | — | — | **0.1%** | | **Total** | **63.5%** | **18.2%** | **18.3%** | **100.0%** | [Business Trends and Conditions](index=9&type=section&id=Business%20Trends%20and%20Conditions) The vacating of the CFPB's late fee rule and the extension of the Amazon program agreement enhance regulatory clarity and long-term partnership stability for Synchrony - The CFPB's final rule on credit card late fees, which would have lowered the safe harbor amount to $8, was **vacated by a court on April 15, 2025**[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - The company extended its program agreement with Amazon in July 2025, with agreements for its **five largest partners now expiring between 2030 and 2035**[39](index=39&type=chunk) [Results of Operations](index=12&type=section&id=Results%20of%20Operations) Q2 2025 net earnings increased 50.4% to $967 million due to lower credit loss provisions, while six-month net earnings decreased 10.5% to $1.7 billion, impacted by a prior-year gain Summary Earnings (in millions) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | **($ in millions)** | **2025** | **2024** | **2025** | **2024** | | Net interest income | $4,521 | $4,405 | $8,985 | $8,810 | | Retailer share arrangements | $(992) | $(810) | $(1,887) | $(1,574) | | Provision for credit losses | $1,146 | $1,691 | $2,637 | $3,575 | | Other income | $118 | $117 | $267 | $1,274 | | Other expense | $1,245 | $1,177 | $2,488 | $2,383 | | **Net earnings** | **$967** | **$643** | **$1,724** | **$1,936** | - Provision for credit losses decreased significantly, driven by **reserve releases of $265 million in Q2 2025** compared to a reserve build of $70 million in Q2 2024, as well as lower net charge-offs[72](index=72&type=chunk) - Retailer share arrangements increased by **22.5% in Q2 2025**, reflecting lower net charge-offs and the impact of product, pricing, and policy changes[71](index=71&type=chunk) [Platform Analysis](index=19&type=section&id=Platform%20Analysis) Q2 2025 platform performance showed varied results, with Digital platform interest and fees growing 2.1% to $1.6 billion, while Home & Auto interest and fees decreased 1.0% to $1.4 billion Purchase Volume by Platform (Q2 2025 vs Q2 2024, in millions) | Platform | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Home & Auto | $11,459 | $12,350 | -7.2% | | Digital | $13,647 | $13,403 | +1.8% | | Diversified & Value | $15,393 | $15,333 | +0.4% | | Health & Wellness | $4,007 | $4,089 | -2.0% | | Lifestyle | $1,432 | $1,525 | -6.1% | Interest and Fees on Loans by Platform (Q2 2025 vs Q2 2024, in millions) | Platform | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Home & Auto | $1,395 | $1,409 | -1.0% | | Digital | $1,576 | $1,544 | +2.1% | | Diversified & Value | $1,159 | $1,165 | -0.5% | | Health & Wellness | $923 | $911 | +1.3% | | Lifestyle | $261 | $258 | +1.2% | [Financial Condition, Liquidity and Capital](index=22&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital) Synchrony's financial condition remains strong with $99.8 billion in loan receivables, improved credit quality, robust liquidity of $21.8 billion, and a CET1 ratio of 13.6% - Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased to **4.18% at June 30, 2025**, from 4.47% at June 30, 2024[104](index=104&type=chunk) - The company maintains a strong liquidity portfolio of **$21.8 billion in liquid assets** as of June 30, 2025, up from $17.2 billion at year-end 2024[138](index=138&type=chunk) Regulatory Capital Ratios (Synchrony Financial) | Ratio | At June 30, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | **Common equity Tier 1 capital** | 13.6% | 13.3% | | **Tier 1 risk-based capital** | 14.8% | 14.5% | | **Total risk-based capital** | 16.9% | 16.5% | | **Tier 1 leverage** | 12.7% | 12.9% | [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) Synchrony updated its Allowance for Credit Losses methodology in Q1 2025 to a statistical, account-level model, enhancing loss estimation without material impact, maintaining a 12-month forecast period - In Q1 2025, the company changed its methodology for the Allowance for Credit Losses to a **statistical, account-level model** analyzing probability of default and exposure at default, replacing the prior enhanced migration analysis[162](index=162&type=chunk) - The reasonable and supportable forecast period for estimating expected credit losses remains at **12 months**, after which the company reverts to historical loss information over a 6-month period on a straight-line basis[168](index=168&type=chunk) [Financial Statements](index=35&type=section&id=Item%201.%20Financial%20Statements) This section provides unaudited condensed consolidated financial statements for Q2 and six months ended June 30, 2025, including core statements and detailed notes on accounting policies, credit losses, and regulatory capital [Condensed Consolidated Financial Statements](index=36&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements show Q2 2025 net income of $967 million, total assets of $120.5 billion, and $4.8 billion cash from operations for the first six months - The report includes the following unaudited statements: Condensed Consolidated Statements of Earnings, Comprehensive Income, Financial Position, Changes in Equity, and Cash Flows[180](index=180&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=43&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes to financial statements detail a decrease in allowance for credit losses to $10.6 billion, $16.0 billion in total borrowings, and confirm strong regulatory capital ratios, with no material adverse legal matters Allowance for Credit Losses Roll-Forward (Six Months Ended June 30, 2025, in millions) | | Credit cards | Consumer installment loans | Commercial credit products | Total | | :--- | :--- | :--- | :--- | :--- | | **Balance at Jan 1, 2025** | $10,259 | $542 | $127 | **$10,929** | | Provision charged to operations | $2,413 | $173 | $48 | **$2,634** | | Gross charge-offs | $(3,496) | $(202) | $(68) | **$(3,766)** | | Recoveries | $730 | $32 | $5 | **$767** | | **Balance at June 30, 2025** | **$9,906** | **$545** | **$112** | **$10,564** | - As of June 30, 2025, total borrowings were **$16.0 billion**, consisting of $8.3 billion from consolidated securitization entities and $7.7 billion in senior and subordinated unsecured notes[277](index=277&type=chunk) - Synchrony Bank's **CET1 ratio was 14.3%** at June 30, 2025, well above the 6.5% minimum required to be considered well-capitalized[302](index=302&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Synchrony's primary market risk is interest rate risk, with a 100 basis point rate increase projected to boost net interest income by $73 million, while a decrease would reduce it by $164 million Net Interest Income Sensitivity (Next 12 Months) | Basis Point Change | Impact at June 30, 2025 (in millions) | | :--- | :--- | | -100 basis points | $(164) | | +100 basis points | $73 | [Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[327](index=327&type=chunk) [PART II - OTHER INFORMATION](index=67&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity security sales, and other required disclosures [Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) Synchrony is involved in routine legal and regulatory matters, none of which are expected to have a material adverse effect on its financial condition or liquidity - The company does not believe it is a party to any pending legal or regulatory matters that would have a **material adverse effect** on its condensed consolidated financial condition or liquidity[320](index=320&type=chunk) [Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K were reported - No **material changes to the risk factors** from the 2024 Form 10-K were reported[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Synchrony repurchased 8.8 million shares for $500 million in Q2 2025 and approved a new $2.5 billion share repurchase program through June 2026, with $2.0 billion remaining Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Dollar Value (in millions) | | :--- | :--- | :--- | :--- | | April 1 - 30, 2025 | 1,963,034 | $51.70 | ~$98.7 | | May 1 - 31, 2025 | 5,260,066 | $56.98 | ~$299.7 | | June 1 - 30, 2025 | 1,654,690 | $61.48 | ~$101.7 | | **Total Q2 2025** | **8,877,790** | **$56.32** | **$500.0** | - In April 2025, the Board approved a new share repurchase program of up to **$2.5 billion through June 30, 2026**, with $2.0 billion remaining authorized for repurchase at the end of Q2 2025[334](index=334&type=chunk)[148](index=148&type=chunk) [Other Part II Items](index=67&type=section&id=Other%20Part%20II%20Items) This section confirms no defaults on senior securities, no applicable mine safety disclosures, and no Rule 10b5-1 trading plan changes by directors or officers - Item 3: No defaults upon senior securities[335](index=335&type=chunk) - Item 5: No directors or officers adopted, modified, or terminated a **Rule 10b5-1 trading arrangement** during the quarter[338](index=338&type=chunk)