Synchrony (SYF) Down 0.8% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Synchrony (SYF). Shares have lost about 0.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Synchrony due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Synchrony Financial before we dive into how investors and analysts have reacted as of late.

Synchrony Q4 Earnings Beat Estimates on Improved Efficiency

Synchrony Financial reported fourth-quarter 2025 adjusted earnings per share (EPS) of $2.18, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased from $1.91 per share a year ago.

Net interest income was $4.8 billion, which grew 3.7% year over year. However, it missed the consensus mark by 0.6%.

The quarterly earnings benefited from improved purchase volume, net interest margin, increased interest and fees on loans in sales platforms like Digital and Health & Wellness, and an improved efficiency ratio. Reduced provision for credit losses also contributed to the upside. However, the upside was partly offset by declining overall loan receivables and average active accounts.

Synchrony’s Q4 Results in Detail

Retailer share arrangements of Synchrony advanced 19% year over year to $1.1 billion in the quarter under review. Total loan receivables of $103.8 billion slipped 0.9% year over year and missed the Zacks Consensus Estimate of $104.3 billion.

Total deposits dipped 1.1% year over year to $81.1 billion and fell short of our estimate of $81.5 billion. Provision for credit losses was $1.4 billion, which tumbled 7.6% year over year on the back of decreased net charge-offs. The metric came in lower than our estimate of $1.8 billion.

Synchrony’s purchase volume rose 3.2% year over year to $49.5 billion, driven by improved consumer spending. The figure beat our estimate of $48.5 billion.

Interest and fees on loans totaled $5.5 billion, which increased 1% year over year but missed our estimate of $5.6 billion. The metric was aided by an expanding loan receivables yield, partly offset by a decline in benchmark rates and late fee incidence. Net interest margin improved 82 basis points (bps) year over year to 15.8% in the fourth quarter, slightly higher than the Zacks Consensus Estimate of 15.7%.

Average active accounts of 69.3 million slipped 1.4% year over year. However, it beat the Zacks Consensus Estimate of 68.8 million and our estimate of 69 million.

Total other expenses of SYF increased 10.4% year over year to $1.4 billion and beat our estimate of $1.3 billion. The efficiency ratio of 36.9% improved 360 bps year over year and surpassed the consensus mark of 32.7%.

Movement in Individual Sales Platforms

Home & Auto period-end loan receivables decreased 5.4% year over year in the fourth quarter. Purchase volume tumbled 1.6% year over year due to lower average active accounts and reduced consumer spending in Home Improvement. Interest and fees on loans declined 2.2% year over year.

Digital period-end loan receivables rose 2.4% year over year. Purchase volume increased 5.8% year over year, driven by a rise in spend per account and a strong response from customers to improved product offerings and refreshed value propositions. Interest and fees on loans rose 5.1% year over year.

Diversified & Value period-end loan receivables increased 1.8% year over year in the quarter under review. Purchase volume rose 4.5% year over year, driven by the impact of partner expansion. Interest and fees on loans decreased 0.5% year over year.

Health & Wellness period-end loan receivables improved 0.7% year over year. Purchase volume rose 4.1% year over year, driven by increased spend per account and growth in Pet and Audiology. Interest and fees on loans advanced 4.7% year over year.

Lifestyle period-end loan receivables decreased 2.1% year over year in the fourth quarter. Purchase volume rose 2.8% year over year, driven by improved broad-based spend per account. Interest and fees on loans fell 1.1% year over year.

Synchrony’s Financial Position (As of Dec. 31, 2025)

Synchrony exited the fourth quarter with cash and equivalents of $15 billion, which climbed from the 2024-end level of $14.7 billion.

Total assets of $119.1 billion decreased from the figure of $119.5 billion at 2024-end.

Total borrowings were $15.2 billion, down from the figure of $15.5 billion as of Dec. 31, 2024.

Total equity of $16.8 billion increased from the 2024-end figure of $16.6 billion.

SYF’s balance sheet was consistently strong in the reported quarter, with total liquidity of $16.6 billion accounting for 13.9% of its total assets.

Return on assets decreased 10 bps year over year to 2.5% in the fourth quarter. Return on equity was 17.6%, which declined 130 bps year over year.

Capital Deployment Update

Synchrony returned capital worth $952 million through share buybacks and paid common stock dividends of $106 million in the fourth quarter. As of Dec. 31, 2025, it had a leftover capacity of around $1.2 billion under its share buyback authorization for the period ending June 30, 2026.

Full-Year 2025 Update

In 2025, Synchrony reported adjusted earnings per share of $9.28, which rose 8.5% from the 2024 figure. The company's net interest income grew 2.5% year over year to $18.5 billion. Purchase volume of $182.3 billion rose 0.1% year over year.

Synchrony’s 2026 Guidance

Synchrony anticipates mid-single digit growth in period-end loan receivables. The company expects to witness growth in purchase volume and average active accounts. It also expects the payment rate to be higher.

Management projects net charge-offs to be between 5.5% and 6%. Meanwhile, EPS is forecasted to be within the band of $9.10-$9.50 for 2026.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, Synchrony has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock has a score of A on the value side, putting it in the top 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Synchrony has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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