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Synchrony Financial (SYF) is back in focus after its latest earnings update, where better-than-expected adjusted EPS contrasted with a cautious 2025 net revenue outlook tied to moderating consumer spending and anticipated Federal Reserve rate cuts.
See our latest analysis for Synchrony Financial.
Synchrony’s latest guidance has come after a choppy few weeks for the stock, with a 16.37% decline in the 1 month share price return and a 12.59% drop year to date, even though the 1 year total shareholder return is 10.45% and the 3 year total shareholder return is around 2.2x. This suggests that long term momentum has been stronger than the recent pullback.
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With revenues flat on the year, earnings ahead of expectations, a lower forward outlook, and a P/E that sits below the consumer finance peer average, is Synchrony now trading at a discount, or is the market already pricing in future growth?
Synchrony Financial’s most followed narrative pegs fair value at $105 per share, compared to the last close of $73.99, pointing to a sizeable valuation gap in the current price.
Fair Value vs. Current Price
Your intrinsic valuation: ~$145.46
Current price: ~$84.5
Implied discount: ~40%+
➡️ Interpretation: Based on your discount-rate assumptions, ROE expansion, and perpetual growth rate, SYF appears significantly undervalued relative to its fundamentals and long-term shareholder returns.
Market & Analyst Lens
Curious how this narrative gets to a higher fair value than the $105 figure you see here? The key ingredients are return on equity, the cost of capital, and how long healthy excess returns can be sustained. Want to see how those moving parts combine into that valuation story?
Result: Fair Value of $105 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this story can break if credit losses climb faster than expected or if new regulation puts pressure on fee income and returns.
Find out about the key risks to this Synchrony Financial narrative.
If you see the numbers differently or want to stress test your own assumptions, you can build a fresh narrative yourself in just a few minutes by starting with Do it your way.
A great starting point for your Synchrony Financial research is our analysis highlighting 6 key rewards and 3 important warning signs that could impact your investment decision.
If Synchrony has sparked fresh thinking about your portfolio, do not stop here. Use the Simply Wall St screener to compare other opportunities side by side.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SYF.
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