BTIG affirms Synchrony Financial (NYSE: SYF) with a Buy rating and $42 price target following Q2 results released Friday morning.

Analyst Mark Palmer commented today, While concerns about credit have weighed on shares of Synchrony Financial (SYF) since management on June 8 noted its expectations of a 20-30bps increase in net charge-offs (NCOs) during the next 12 months, the 2Q16 report the company released this morning offers confirmation that the anticipated credit deterioration is already baked into the stock, while returning the focus to SYF’s core story of increasing growth, profitability and capital return.

SYF delivered a 2Q16 earnings beat as loan receivables, purchase volume and net interest income increased by 11%, 9% and 10%, respectively, versus the prior year period. The company reported 2Q16 earnings per share of $0.58, outpacing the consensus estimate (and our estimate) of $0.54, the analyst noted.

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