Venmo's Credit Card Could be a Needle Mover for Synchrony Financial (SYF) Adding Over 25c to EPS - BofA Securities

BofA Securities analyst Mihir Bhatia reiterated a Buy rating on Synchrony Financial (NYSE: SYF) after sizing the opportunity for PayPal's (NASDAQ: PYPL) Venmo credit card with Jason Kupferberg. Considering that Venmo has 70M active users and SYF management believes this could grow into a top-10 program within the portfolio, it has the potential to be a big opportunity.

The analyst stated "More of a needle mover for SYF but PYPL also benefits. Our scenario analysis suggests the Venmo card could lift SYF’s 2021 EPS by $0.09-$0.27, or 2-7%. For PYPL, our analysis suggests a 1-3% EPS lift this year. A key wildcard in this analysis is of course the adoption rate and usage patterns of the card among the Venmo user base. Our base case assumes that 10% of active Venmo users adopt the card, and use it an average of 30 times this year. We calculate card economics based on previous disclosures SYF has provided with respect to generic co-brand programs."

For an analyst ratings summary and ratings history on PayPal click here. For more ratings news on PayPal click here.

Shares of PayPal closed at $273.86 yesterday.

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