UBS Cuts Price Target on Synchrony Financial (SYF) Following 3Q Earnings Report
UBS maintained a Neutral rating on Synchrony Financial (NYSE: SYF), and cut the price target to $33.50 (from $35.00), following the company's 3Q earnings results. During the quarter the company saw 12% y/y growth in its receivables portfolio.
Analyst Matthew Howlett commented, "We are revising our estimates for SYF down slightly and lowering our 12-month price target to $33.50 (from $35) while maintaining our Neutral rating following the release of the company's 3Q15 earnings. During the quarter the company saw 12% y/y growth in its receivables portfolio, just above our 11% projection, supported by strong purchase volume growth (12%). Our concerns stem not so much from SYF's performance but rather from the revised sales forecasts of some of SYF's major partners, such as JCPenney, Gap, and especially Walmart, which recently guided to a 6-12% decrease in FY2017 earnings. We are lowering our 2016 EPS estimate to $2.73 from $2.77, which implies a 4% increase in earnings for the year, and our 2017 EPS estimate to $2.90 from $2.93, which implies a 6% increase in earnings for the year."
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Shares of Synchrony Financial closed at $31.34 yesterday.