Key Takeaways Capital One and Synchrony Financial differ in scale, strategy and long-term growth outlook.COF's Discover buyout and strong NII growth support higher revenue forecasts through 2027.SYF's partnerships drive steady growth, but earnings estimates face near-term pressure.With significant footprints in credit card issuance and consumer lending, Capital One (COF) and Synchrony Financial (SYF) are both key players in the consumer finance space. Both companies are deeply influenced by consumer credit ...

Core Viewpoint - The health of the Synchrony consumer has evolved over the past year, reflecting a K-shaped recovery in the economy, with pressure felt more at the lower end of the consumer spectrum while the high end performs well [1]. Group 1: Consumer Health - Synchrony is one of the few full-spectrum lenders in the United States, indicating its significant role in the consumer lending market [1]. - The company has previously identified a K-shaped recovery, suggesting that different segments of consumers are experiencing varying levels of economic recovery [1].

Synchrony Financial 2026 Conference Summary Company Overview - **Company**: Synchrony Financial (NYSE: SYF) - **Date of Conference**: February 10, 2026 Key Points Industry Insights - The consumer finance sector is experiencing a K-shaped recovery, with stability observed in non-prime consumers while the middle-income segment faces pressure due to wage growth and affordability issues [7][8][9] - The high-end consumers are showing signs of reduced spending, while the non-prime consumers are adapting well to economic pressures [8][11] Consumer Behavior - Non-prime consumers are demonstrating resilience by taking multiple jobs and engaging in the gig economy, while middle-income consumers are struggling with disposable income [11] - Average tax refunds are expected to increase by approximately $1,000, benefiting higher-income consumers more than moderate-income consumers [13][14] - Purchase volume is anticipated to rise among moderate-income consumers, while higher-income consumers may focus on debt repayment or savings [14][15] Financial Performance - Synchrony Financial's loan receivables are projected to grow in the mid-single digits, with a slight decline of 50 basis points year-over-year noted in recent data [39][41] - Delinquencies are performing better than seasonal expectations, with early-stage delinquencies down 7 basis points compared to historical averages [42][72] - The company is experiencing a sub-5% loss rate, indicating strong credit quality [42] Strategic Initiatives - Synchrony is focusing on expanding its health and wellness product offerings, which are expected to drive significant growth [61] - Investments in technology and customer experience are prioritized to enhance operational efficiency and consumer engagement [62][63] - The launch of the OnePay Walmart program is highlighted as a significant success, with a richer value proposition compared to previous offerings [29][32] Economic Outlook - The macroeconomic environment is perceived as more stable, with manageable inflation and unemployment rates [44][45] - Net interest income (NII) is expected to grow in 2026, although specific guidance on growth rates was not provided [46][49] - The company is positioned to return capital to shareholders, with a focus on prudent buybacks and maintaining a strong capital position [81][82] Investment and Growth Strategy - Synchrony plans to invest in technology and strategic partnerships to drive long-term growth, with a focus on maintaining low customer acquisition costs [86] - The company aims for double-digit EPS growth by 2027, supported by ongoing investments in its portfolio and technology [86] Credit Quality and Risk Management - Credit metrics are stable, with no significant deterioration expected, and the company is managing credit risk effectively compared to industry peers [72][73] - Reserve releases in 2026 are anticipated to be influenced by growth rates, with a focus on maintaining confidence in credit quality [73] Conclusion - Synchrony Financial is navigating a complex consumer finance landscape with a focus on strategic growth, technological investment, and maintaining credit quality. The company is optimistic about its future performance, aiming for sustainable growth and shareholder value enhancement.

Synchrony Financial (NYSE:SYF) is one of the stocks Jim Cramer commented on. Answering a caller’s query about the stock, Cramer remarked: I don’t want to own Synchrony. I want to own Capital One, COF, the Charitable Trust owns it. It’s pulled back nicely from $259 to $225. Photo by Adam Nowakowski on Unsplash Synchrony Financial (NYSE:SYF) provides credit cards, installment loans, and healthcare financing, and also offers basic banking services. Cramer made similar remarks when he discussed the compan ...

Financial Performance - Net earnings increased 1.5% to $3.6 billion for the year ended December 31, 2025, compared to $3.5 billion in 2024[156]. - Net interest income rose by $455 million to $18.5 billion, primarily due to lower interest expense and a 0.5% increase in interest and fees on loans[159]. - Loan receivables decreased by 0.9% to $103.8 billion at December 31, 2025, reflecting higher payment rates and flat purchase volume[159]. - Over-30 day loan delinquencies decreased by 21 basis points to 4.49% at December 31, 2025, from 4.70% at December 31, 2024[159]. - Total deposits decreased by 1.1% to $81.1 billion at December 31, 2025, representing 84% of total funding sources[159]. - The net charge-off rate decreased by 66 basis points to 5.65% for the year ended December 31, 2025[162]. - The return on assets improved to 3.0% for the year ended December 31, 2025, compared to 2.9% in 2024[162]. - Total interest-earning assets increased to $121,158 million in 2025, with a net interest income of $18,466 million, reflecting a net interest margin of 15.24%[170]. - Credit card loan receivables reached $92,566 million in 2025, generating interest income of $20,683 million at an average yield of 22.34%[170]. - Total liabilities decreased to $102,380 million in 2025, while total equity increased to $16,858 million[170]. Customer Engagement and Digital Strategy - Approximately 60% of consumer revolving credit applications in 2025 were processed through a digital channel, highlighting the company's digital capabilities[28]. - The company continues to invest in digital assets to adapt to the evolving market environment and meet partner and customer needs[28]. - Loyalty programs were expanded in 2025 to include travel-related discounts, enhancing customer engagement and retention[86]. - Approximately 81% of customers primarily use direct channels (internet, mail, phone, and mobile) to manage their bank accounts, indicating a strong consumer preference for direct banking[112]. - The company has invested in servicing and digital platforms to enhance self-service features and improve user experience, including a PayPal-branded affinity deposit product[113]. Sales Platforms and Partnerships - The company operates through five sales platforms: Home & Auto, Digital, Diversified & Value, Health & Wellness, and Lifestyle[32]. - The Home & Auto sales platform accounted for $5.7 billion, or 26%, of total interest and fees on loans for the year ended December 31, 2025[34]. - Digital sales platform accounted for $6.4 billion, or 30%, of total interest and fees on loans for the year ended December 31, 2025[37]. - Diversified & Value sales platform contributed $4.7 billion, or 22%, of total interest and fees on loans for the year ended December 31, 2025[41]. - Health & Wellness sales platform represented $3.8 billion, or 17%, of total interest and fees on loans for the year ended December 31, 2025[44]. - Lifestyle sales platform accounted for $1.1 billion, or 5%, of total interest and fees on loans for the year ended December 31, 2025[49]. - A new partnership with OnePay was launched in September 2025, becoming the exclusive issuer of a credit card program at Walmart[42]. - The company maintains longstanding relationships with partners, including major retailers and digital platforms like Amazon and PayPal, enhancing customer loyalty and sales[28]. Operational Efficiency and Employee Engagement - The company’s operations are primarily within the United States, focusing on managing profitability and expenses across its single business segment[29]. - As of December 31, 2025, the company had over 20,000 full-time employees, with a workforce composition of 61% female and 38% male[133]. - In 2025, 91% of employees participated in the engagement survey, with 95% stating it is a great place to work[132]. - The company plans to increase the minimum wage to $22.50 per hour for all hourly employees in the United States effective March 1, 2026[134]. Financial Management and Risk - The credit risk management strategy is diversified across approximately 115 million open accounts as of December 31, 2025, with no significant individual exposures[117]. - The company utilizes proprietary credit tools, Synchrony PRISM, to gain insights into customer applications and creditworthiness[118]. - The company expects growth in loan receivables and interest and fees on loans in 2026, driven by new programs and improved customer spending behavior[172]. - Provision for credit losses decreased by $1.5 billion to $5.2 billion for the year ended December 31, 2025, primarily due to lower net charge-offs[193]. Capital and Investment - The company repurchased $2.9 billion of its outstanding common stock and declared cash dividends of $1.15 per common share, totaling $427 million[159]. - Capital levels included a Basel III common equity Tier 1 ratio of 12.6% at December 31, 2025, with $427 million in dividends declared and $2.9 billion in stock repurchases[178]. - The company plans to introduce new deposit products and enhancements, including transactional capabilities and additional digital servicing options, to attract new deposits and retain existing ones[114].

Core Viewpoint - Synchrony Financial (SYF) is experiencing challenges in stock performance despite a diverse range of credit products and a significant market cap of $26.6 billion, with concerns about future revenue and consumer spending impacting investor sentiment [1][6]. Company Overview - Synchrony Financial offers various credit products, including credit cards, installment loans, and commercial financing, alongside consumer banking and deposit products [1]. - The company collaborates with major retailers and brands across multiple sectors, including retail, healthcare, and digital services [1]. Stock Performance - Over the past 52 weeks, SYF stock has increased by 13.2%, underperforming the S&P 500 Index, which rose by 14.8% [2]. - Year-to-date, SYF shares have declined by 10.6%, contrasting with the S&P 500's gain of 1.3% [2]. - However, SYF has outperformed the State Street Financial Select Sector SPDR ETF (XLF), which rose by 4.9% during the same period [3]. Financial Performance - In Q4 2025, Synchrony reported an adjusted EPS of $2.18, which was better than expected, yet the stock fell by 5.8% following the announcement [6]. - The company anticipates lower net revenue for 2025, projected between $15.2 billion and $15.7 billion, due to moderating consumer spending and a 3% decline in purchase volume [6]. - Adjusted revenue of $4.76 billion fell short of market expectations, raising concerns about growth despite improvements in net interest income and credit-loss provisions [6]. Analyst Expectations - For the fiscal year ending December 2026, analysts predict a 1.4% year-over-year decline in adjusted EPS to $9.29 [7]. - The earnings surprise history is favorable, with the company exceeding consensus estimates in the last four quarters [7]. - The consensus rating for SYF stock is "Moderate Buy," with 13 "Strong Buys," one "Moderate Buy," and 10 "Holds" among 24 analysts [7]. Price Targets - Morgan Stanley analyst Jeffrey Adelson has maintained a "Hold" rating on SYF, setting a price target of $83 [8]. - The mean price target of $89.67 suggests a potential upside of 21.3% from current levels, while the highest target of $103 indicates a possible upside of 39.4% [8].

Core Viewpoint - Synchrony Financial (NYSE:SYF) is currently considered one of the most undervalued quality stocks available for investment, despite recent adjustments in price targets by various financial institutions [1][2][3]. Group 1: Price Target Adjustments - Truist reduced its price target for Synchrony to $84 from $92 while maintaining a Hold rating, citing an overly optimistic previous outlook on credit following the company's recent earnings report [1]. - RBC Capital adjusted its price target for Synchrony to $85 from $91, maintaining a Sector Perform rating, and described the quarter as encouraging due to year-over-year gains in credit metrics and spending volumes [2]. - TD Cowen lowered its price target for Synchrony to $95 from $100 while keeping a Buy rating, noting a beat on provisions but weaker-than-expected net interest income and operating expenses [3]. Group 2: Company Overview - Synchrony Financial operates as a consumer financial services company in the US, providing credit products such as credit cards, commercial credit products, and consumer installment loans [4].

Core Viewpoint - RBC Capital analyst Jon Arfstrom has lowered the price target for Synchrony (SYF) to $85 from $91 while maintaining a Sector Perform rating after reviewing the company's Q4 results [1] Group 1: Q4 Results - The Q4 results were encouraging, showing improvement in year-over-year spending volumes and credit metrics [1] - The outlook for 2026 is seen as mostly consistent with recent commentary and expectations [1]

Core Viewpoint - Synchrony Financial reported mixed results for Q4, with earnings per share exceeding expectations but sales falling short [1] Financial Performance - Quarterly earnings were $2.18 per share, surpassing the analyst consensus estimate of $2.04 per share [1] - Quarterly sales amounted to $4.761 billion, missing the analyst consensus estimate of $4.769 billion [1] - The company projects FY2026 GAAP EPS to be between $9.10 and $9.50, compared to market estimates of $9.20 [1] Stock Performance - Following the earnings announcement, Synchrony Financial shares increased by 1.9%, trading at $74.39 [1] Analyst Ratings and Price Targets - BTIG analyst Vincent Caintic maintained a Buy rating but reduced the price target from $100 to $96 [3] - Barclays analyst Terry Ma kept an Overweight rating while lowering the price target from $101 to $93 [3] - RBC Capital analyst Jon G. Arfstrom maintained a Sector Perform rating and decreased the price target from $91 to $85 [3]

Synchrony Financial (NYSE:SYF) reported mixed results for the fourth quarter on Tuesday.The company posted quarterly earnings of $2.18 per share which beat the analyst consensus estimate of $2.04 per share. The company reported quarterly sales of $4.761 billion which missed the analyst consensus estimate of $4.769 billion.Synchrony Financial said it sees FY2026 GAAP EPS of $9.10-$9.50, versus market estimates of $9.20.Synchrony Finl shares rose 1.9% to trade at $74.39 on Wednesday.These analysts made change ...