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Synchrony (SYF) Gains But Lags Market: What You Should Know

Zacks Equity Research

Synchrony (SYF) closed the most recent trading day at $31.83, moving +0.89% from the previous trading session. This move lagged the S&P 500's daily gain of 1.1%. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 1.32%.

Coming into today, shares of the consumer credit company had lost 13.59% in the past month. In that same time, the Finance sector lost 6.43%, while the S&P 500 lost 5.05%.

Investors will be hoping for strength from SYF as it approaches its next earnings release. In that report, analysts expect SYF to post earnings of $1.12 per share. This would mark year-over-year growth of 23.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.30 billion, up 2.34% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.21 per share and revenue of $16.89 billion, which would represent changes of +12.57% and +4.35%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for SYF. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. SYF is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that SYF has a Forward P/E ratio of 7.49 right now. Its industry sports an average Forward P/E of 11.03, so we one might conclude that SYF is trading at a discount comparatively.

Also, we should mention that SYF has a PEG ratio of 0.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SYF's industry had an average PEG ratio of 1.32 as of yesterday's close.

The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 97, putting it in the top 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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