Can Synchrony Beat Q3 Earnings Estimates on Improving Margins?

Core Insights - Synchrony Financial (SYF) is expected to report third-quarter 2025 results on October 15, with earnings estimated at $2.16 per share and revenues of $4.7 billion [1][5]. Earnings Estimates - The earnings estimate for the third quarter has remained stable, indicating an 11.3% year-over-year increase, while revenues are projected to grow by 2% year-over-year [2]. - For the full year 2025, the revenue estimate is $18.54 billion, reflecting a 3% year-over-year rise, and the EPS estimate is $8.35, signaling a 26.7% increase year-over-year [3]. Earnings Performance - Synchrony has consistently beaten consensus estimates in the last four quarters, with an average surprise of 17.9% [3]. Earnings Prediction Model - The model predicts a likely earnings beat for Synchrony, supported by a positive Earnings ESP of +5.07% and a Zacks Rank of 3 (Hold) [4]. Factors Influencing Q3 Results - The company is expected to benefit from increased net interest margin and lower provision for credit losses, with net charge-offs likely decreasing significantly [5][7]. - However, increased costs and softer purchase volumes may partially offset these gains [5][7]. Financial Metrics - The consensus estimate for net interest margin is 15.35%, up from 15.04% a year ago, indicating improved profitability [6]. - The net charge-offs ratio is estimated at 5.39, down from 6.06 a year ago, which is expected to positively impact results [7]. Active Accounts and Purchase Volumes - Total average active accounts are projected to decline by 2.3% in Q3, with a marginal decrease in Average Interest-Earning Assets [8]. - Purchase volumes are also expected to decline slightly, with a consensus estimate indicating a 1.1% fall due to selective consumer spending [9].