SYF

Synchrony Financial came into its Q3 2026 report with a low bar on sentiment and a low P/E multiple, yet the stock still slipped about 1.2% to US$73.36 on the day. That reaction jars with the headline print. The lender delivered US$892 million in net income and roughly US$2.74 in basic earnings per share, solid numbers for a consumer finance business. What really challenges the bearish thesis is management lifting its full year earnings outlook to about US$9.50 per share, which puts the post earnings price move in a very different light. Like the raised earnings guidance from Synchrony Financial but unsure whether this valuation reset is really an opportunity in consumer credit? Compare it with stocks in our list of solid balance sheet and fundamentals stocks (25 results). - Total Revenue (Q3 2026 vs Q3 2025): US$2,319 million vs. US$2,677 million (top line declined 13.4%) - Net Income, Excl. Extra Items (Q3 2026 vs Q3 2025): US$892 million vs. US$1,057 million (profit fell 15.6%) - Basic EPS (Q3 2026 vs Q3 2025): US$2.74 vs. US$2.89 (earnings per share slipped 5.0%) - Net Interest Margin, Trailing 12 Months to Q4 2025 vs Prior TTM to Q3 2025: 15.24% vs. not disclosed (margin level reported, but there is no direct prior-period comparison) Ask Charlie what Synchrony said about AI shaping future spending. Optimists argue Synchrony Financial's partner ecosystem plus AI should convert into steadier volume and earnings power over time. "Broad based internal adoption of AI tools, with 90% of exempt employees already using them and a dedicated Chief AI Officer in place, creates scope to automate more servicing and back office work." Q3 results show early proof points. Record purchase volume of about US$50b with loan receivables up only 3% indicates heavy repayment but still healthy usage across platforms. Noninterest expense rose 10% and the efficiency ratio moved to roughly 35.9%, so the AI productivity story is not yet visible in costs, even as digital partnerships such as CareCredit on Stripe and the ChatGPT plugin begin to feed volume. One Narrative disagrees with today's price. → See where this Narrative says Synchrony Financial should trade. Bearish investors argue that Synchrony Financial's earnings strength rests on shaky growth and margin foundations rather than a healthy revenue engine. "Although Synchrony Financial is highlighting strong earnings metrics such as a 2.9% return on average assets and 25.2% return on tangible common equity, the recent pattern of flat Q1 2026 revenue and only 2% Q2 2026 revenue growth that both missed expectations suggests that revenue growth may not keep up with current profitability levels, which could pressure earnings quality if this gap persists." Q3 keeps that concern alive. Adjusted revenue of US$4.81b slightly missed forecasts again, even as EPS beat and guidance moved to about US$9.50. Record US$50b purchase volume and mid single digit loan growth show activity. However, elevated payment rates still limit receivables, so the gap between strong returns and slower top line progress is not closed. Synchrony Financial recently reported strong earnings while its share price stayed relatively steady. The real opportunity is spotting stocks that could be undervalued before the market adjusts their prices. - Company 1 - 32% below our estimate - uses large-scale AI superclusters to handle demanding workloads across multiple cloud providers. - Company 2 - 24% below our estimate - supplies diagnostic equipment supporting grid upgrades for electrified transport and advanced digital monitoring. - Company 3 - 30% below our estimate - sells modular data center components enabling faster deployment and tailored configurations for large AI buyers. Three companies from the same screener. Open the full list of 34 companies trading below our fair value estimates → 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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Net Earnings: $892 million, or $2.68 per diluted share. - Return on Average Assets: 2.9%. - Return on Tangible Common Equity: 25.2%. - Tangible Book Value per Share: Up 6% year over year. - Purchase Volume: Nearly $50 billion, up 8% year over year; highest third-quarter level in company history; grew across all five sales platforms. - Platform Purchase Volume Growth: Diversified Value +13%, Home & Auto +9%, Lifestyle +6%, Digital +5%, Health & Wellness +3%. - Co-Branded Card Spend: ~53% of total spend; co-branded card spend up 23% year over year. - Ending Loan Receivables: $103 billion, up 3%. - Payment Rate: 16.9%, ~60 bps higher than last year and ~180 bps above pre-pandemic third-quarter average. - Net Interest Income: $4.8 billion, up 2%. - Interest and Fees: Up 1%, driven by growth in average loan receivables. - Interest Expense: Down 3%, due to lower benchmark rates. - Net Interest Margin: Decreased year over year (loan yield ?20 bps, liquidity portfolio yield ?62 bps, loan mix ?22 bps; partly offset by 27 bps lower interest-bearing liability cost); increased 42 bps sequentially. - Net Charge-Off Rate: 4.79%, down 37 bps from 5.16% prior year. - Provision for Credit Losses: $1.3 billion, up $120 million, including a $30 million reserve build vs. a $152 million release prior year. - Allowance for Credit Losses: 10.01% of loan receivables, down ~8 bps sequentially and ~34 bps year over year. - Other Income: $105 million, down $22 million, reflecting higher loyalty costs. - Other Expense: $1.4 billion, up 10%, driven by operational losses, technology investments and marketing. - Efficiency Ratio: 35.9%, ~330 bps higher than last year. - Deposits: Direct deposits up $2.4 billion; broker deposits up ~$575 million; deposits 83% of total funding. - Liquid Assets: $19.5 billion, up 7%; 15.9% of total assets. - CET1 Ratio: 12.9%, down 140 bps year over year. - Capital Returns: $1.2 billion returned in Q3 ($1.1 billion buybacks, $110 million dividends); ~$4.6 billion remaining repurchase authorization. - Full-Year 2026 EPS Outlook: ~$9.50 diluted EPS, high end of original expectations; year-end loan receivables growth mid-single digits; net charge-offs below 5.5%. - Warning! GuruFocus has detected 7 Warning Signs with SYF. - Is SYF fairly valued? Test your thesis with our free DCF calculator. Release Date: October 20, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Synchrony Financial (NYSE:SYF) delivered record third-quarter purchase volume of nearly $50 billion, up 8% year-over-year, with growth across all five sales platforms. - Credit performance remained strong, with net charge-off rate decreasing 37 basis points to 4.79% and delinquency rates in line with the prior year. - Synchrony Financial (NYSE:SYF) is investing in digital commerce and AI, including a ChatGPT plug-in and integration with Stripe, to position itself at the forefront of agentic commerce. - The company returned $1.2 billion to shareholders in Q3, including $1.1 billion in share repurchases, and has $4.6 billion remaining under its repurchase authorization. - Synchrony Financial (NYSE:SYF) expects to deliver approximately $9.50 in diluted EPS for full-year 2026, the high end of its original guidance, and sees a path to double-digit EPS growth next year. - The implied fourth-quarter EPS guidance points to a slight downside versus Street expectations, partly due to reserve cadence and loss trajectory. - Payment rate remains elevated at 16.9%, up 60 basis points year-over-year, pressuring loan growth and net interest margin. - Net interest margin decreased year-over-year due to lower loan receivable yield, reduced liquidity portfolio yield, and a lower mix of loan receivables. - Other expense increased 10% to $1.4 billion, driven by higher operational losses, technology investments, and increased marketing expenditures, raising the efficiency ratio to 35.9%. - Deposit betas are expected to be higher in this rate cycle due to competitive dynamics, potentially offsetting some of the benefits from portfolio seasoning and loan growth. Q: Ryan Nash (Goldman Sachs) asked about the implied 4Q EPS guide pointing to downside versus Street expectations and whether Synchrony still sees a path to double-digit EPS growth next year. A: CFO Brian Wenzel noted the full-year guide of approximately $9.50 is at the high end of the original $9.10$9.50 range set before macro pressures like higher gas prices and inflation, and is above consensus of ~$9.38$9.40. He attributed the 4Q delta largely to how consensus modeled the reserve and loss trajectory between 3Q and 4Q. While declining to give 2027 guidance, he said the framework remains: grow NII roughly in line with loan growth, benefit from new portfolio seasoning, drive operating leverage, and combine with capital return to support double-digit EPS growth next year. Q: Sanjay Sakhrani (KBW) asked about the health of the consumer and whether anything underneath the numbers is weighing on them. A: CEO Brian Doubles said trends remain stronghigher gas prices, broad inflation, and weak consumer confidence are not changing behavior, supported by a strong labor market and decent wage growth. CFO Brian Wenzel added that non-prime payment rates rose 40 basis points quarter-over-quarter, matching the increase for 780-plus FICO customers, and that entry rates into delinquency remain better than 2018 and a couple of years ago, aided by pre-delinquency strategies and credit actions. Q: Sanjay Sakhrani (KBW) asked how agentic commerce might affect private label and Synchrony's positioning. A: CEO Brian Doubles said agentic commerce will fundamentally change how consumers discover and purchase, and Synchrony has a jump start working with leading AI platforms. Partners are pulling Synchrony into these discussions to protect their value propositions and RSAs. He believes agents will reduce historical friction (e.g., forgotten cards) and that transparency will advantage Synchrony, since its products typically offer more savings and better offers than general purpose cards. Q: Moshe Orenbuch (TD Cowen) asked about the acceleration in prime volume and what it means for revolve rates, plus the drivers of the elevated efficiency ratio. A: CFO Brian Wenzel said the prime mix is partly product-related, as Dual Card is a larger share of the book and skews to 680-plus Vantage scores, with Pay Later carrying higher tickets than typical BNPL. On efficiency, he said operational losses were hit by idiosyncratic events this year, with over 100 mitigation strategies implemented and expected to bring losses down in 2027; technology investments in AI, cloud, digital wallets, and Pay Later are deliberate and should remain slightly elevated into next year before tapering. Q: Terry Ma (Barclays) asked where Synchrony is in the seasoning cycle for new programs and when payment rate dynamics could become a tailwind. A: CFO Brian Wenzel said the largest new program, the OnePay Walmart portfolio, takes about three vintages to reach steady state, so it is roughly one-third through seasoning at the end of 2026, with P&L effects mitigating in years two and three. Other portfolios like Bob's and Lowe's commercial have different payment rate profiles. He expects the translation between sales and assets to narrow for new portfolios as vintages mature. Q: Terry Ma (Barclays) asked whether the agentic commerce opportunity is mainly about protecting checkout position or expanding customer acquisition. A: CEO Brian Doubles said it is a big opportunity on both fronts: agents make it easier to use Synchrony cards (e.g., programming an agent to always use a partner card for 5% off), reducing friction, and personal agents comparing offers will favor Synchrony's products given their strong value, discounts, and cash backnaturally advantaging its business model and partners. Q: Don Fandetti (Wells Fargo) asked about the competitive environment from legacy lenders and digital players, and whether bolt-on acquisitions are needed. A: CEO Brian Doubles said competitive dynamics have been consistent for three to four years, with the notable change being nontraditional partners like payment processor Stripe, which represents the new frontier of one-to-many distribution. Pricing and terms remain rational, partly due to uncertainty around 20272028, and Synchrony renewed and won many programs this year. On M&A, Synchrony remains disciplined, preferring small companies it can grow with its scale. Q: Jeffrey Adelson (Morgan Stanley) asked what drove the lower-than-expected RSA this quarter and how to think about its trajectory. A: CFO Brian Wenzel said RSA moves within a normal range and the biggest driver is portfolio mixwhich partner holds the creditrather than any structural change to agreements. He noted RSA can also be viewed as a percentage of total purchase volume, which is a more steady effect, and current levels remain consistent with the typical range. Q: Darrin Peller (Wolfe Research) asked for 4Q NIM puts and takes, including loan yield, funding costs, and deposit betas. A: CFO Brian Wenzel said NIM should increase quarter-over-quarter, helped by a higher mix of loan receivables in interest-earning assets. One more rate increase is expected in December, with prime rate benefits flowing through in November and December, while merchant discount is a slight but immaterial negative. Core interest and fees should benefit as losses moderate. He also flagged that deposit betas will likely be higher than in the past hiking cycle given competitive promotional pricing. Q: Mihir Bhatia (Bank of America) asked about the 4Q reserve and loss cadence and expected allowance coverage decline. A: CFO Brian Wenzel clarified his earlier comment referred to reserve coverage cadence, not charge-offs. He expects the typical seasonal decline in coverage in 4Q to be smaller than usualaround 25 basis points rather than the historical 3040 basis pointsgiven portfolio seasoning and credit action maturation, with loss rates building from 2026 to 2027 as Walmart losses come online. This assumes a steady macro backdrop. Q: Robert Wildhack (Autonomous Research) asked why digital segment growth slowed this quarter and whether agents could cause consumers to optimize rewards and revolve less. A: CFO Brian Wenzel attributed the digital slowdown to timing of value proposition launches and marketing cadence, plus For the complete transcript of the earnings call, please refer to the full earnings call transcript.

For the quarter ended September 2026, Synchrony (SYF) reported revenue of $4.81 billion, up 1.9% over the same period last year. EPS came in at $2.68, compared to $2.86 in the year-ago quarter. The reported revenue represents a surprise of -0.56% over the Zacks Consensus Estimate of $4.84 billion. With the consensus EPS estimate being $2.48, the EPS surprise was +8.07%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Synchrony performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Efficiency Ratio: 35.9% versus the four-analyst average estimate of 34.8%. - Net interest margin: 15.5% compared to the 15.5% average estimate based on four analysts. - Total - Average loan receivables, including held for sale: $102.28 billion versus the three-analyst average estimate of $102.73 billion. - Net charge-offs as a % of average loan receivables, including held for sale: 4.8% versus 5% estimated by three analysts on average. - Total - Purchase volume: $49.71 billion versus $49.21 billion estimated by three analysts on average. - Total - Period-end loan receivables: $103.35 billion versus $103.46 billion estimated by three analysts on average. - Average Balance - Total interest-earning assets: $123.08 billion compared to the $122.71 billion average estimate based on three analysts. - Platform Analysis - Digital - Purchase volume: $14.72 billion compared to the $15.17 billion average estimate based on two analysts. - Platform Analysis - Home & Auto - Period-end loan receivables: $30.89 billion compared to the $30.47 billion average estimate based on two analysts. - Platform Analysis - Digital - Average loan receivables, including held for sale: $28.83 billion compared to the $29.23 billion average estimate based on two analysts. - Platform Analysis - Diversified & Value - Purchase volume: $17.39 billion compared to the $16.75 billion average estimate based on two analysts. - Platform Analysis - Diversified & Value - Period-end loan receivables: $21.15 billion compared to the $21.05 billion average estimate based on two analysts. View all Key Company Metrics for Synchrony here>>> Shares of Synchrony have returned -1% over the past month versus the Zacks S&P 500 composite's +0.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Synchrony Financial (SYF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Achieved record third-quarter purchase volume of nearly $50 billion, driven by double-digit growth in discretionary categories like electronics and entertainment despite macro headwinds. - Performance was bolstered by the Prism underwriting platform, which utilizes 9,000 data variables to capture growth among Gen Z and Millennial demographics often overlooked by traditional lenders. - Co-branded card spend increased 23% year-over-year, reflecting enhanced utility and value propositions that drove higher out-of-partner spending in both discretionary and non-discretionary categories. - Management attributed the 8% volume growth to successful partner expansions and the impact of higher gas prices, particularly within the Diversified and Value and Home and Auto platforms. - Net interest margin benefited from a seasonal decline in earned income reversals and a shift toward a higher mix of loan receivables as a percentage of interest-earning assets. - Operational expenses increased 10% due to strategic technology investments in cloud and AI, alongside idiosyncratic operational losses that management believes are now contained. - Credit performance remained strong with net charge-offs decreasing 37 basis points year-over-year, supported by disciplined underwriting and effective pre-delinquency strategies. - Full-year 2024 EPS guidance was narrowed to the high end of the original range at approximately $9.50., assuming mid-single-digit loan growth and normal seasonal loss patterns. - Management anticipates double-digit EPS growth in 2025., driven by NII growth mirroring loan expansion, capital returns, and the absence of one-time operational losses. - The outlook for net interest margin in Q4 assumes a sequential increase driven by a higher mix of loan receivables and core interest and fee growth. - Future credit loss projections incorporate the maturation of new portfolio seasoning, specifically the Walmart portfolio, which is expected to reach steady state over three vintages. - Strategic focus is shifting toward 'Agentic Commerce,' with management positioning Synchrony's products to be embedded in AI-driven discovery and purchasing paths to reduce transaction friction. - Identified idiosyncratic operational losses in the quarter related to new partner launches and system changes, which management has addressed through over 100 mitigation strategies. - Payment rates remained elevated at 16.9%, approximately 180 basis points above pre-pandemic levels, primarily due to shifts in portfolio mix and lower promotional balances. - The CET1 ratio decreased 140 basis points year-over-year to 12.9% as the company aggressively returned $1.2 billion to shareholders through repurchases and dividends. - New integrations with Stripe and Vetspire were highlighted as key drivers for expanding the CareCredit footprint into digital checkout and AI-enabled veterinary platforms. - Management clarified that the Q4 outlook reflects a specific reserve cadence and loss trajectory that may differ from analyst consensus. - Confidence in 2027 double-digit EPS growth is supported by expected operating leverage and continued aggressive but prudent share repurchases. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Over 90% of the year-over-year payment rate increase is mix-related, specifically driven by new portfolios and lower promotional balances. - Management noted 'green shoots' in dental and furniture categories that could help promotional assets return to more historical levels over time. - AI agents are expected to favor Synchrony's products because they provide high transparency on value, such as 5% cashback or first-purchase discounts. - Management believes agents will remove the friction of consumers forgetting their cards, as cards can be programmed for specific partner transactions. - Management expects deposit betas to be higher in this cycle than in the past due to intense competitive dynamics and promotional pricing in the market. - The company is currently finalizing its 2027 plan to identify offsets for potential headwinds caused by higher funding costs. - The typical seasonal decline in the coverage ratio in Q4 may be less pronounced this year due to the seasoning of the Walmart portfolio and recent credit actions. - Management maintains a 'downward bias' for the coverage rate, assuming the macroeconomic environment remains steady.

Synchrony Financial SYF reported third-quarter 2026 adjusted earnings per share (EPS) of $2.68, which surpassed the Zacks Consensus Estimate by 8.1%. However, the bottom line decreased 6.3% year over year. Net interest income increased 1.9% year over year to $4.8 billion but missed the consensus estimate by 0.6%. The growth was driven by higher average loan receivables and lower funding costs. The quarterly earnings were aided by strong purchase volume and improved credit performance. However, higher operating expenses and an increase in the provision for credit losses partly offset these positives. Synchrony Financial price-consensus-eps-surprise-chart | Synchrony Financial Quote Retailer share arrangements (RSA) of Synchrony advanced 7% year over year to $1.1 billion in the third quarter. Total loan receivables were $103.3 billion, up 3.2% year over year. The figure missed the Zacks Consensus Estimate of $103.5 billion as well as our estimate of $104 billion. Total deposits increased 3.8% year over year to $83 billion but missed our estimate of $83.9 billion. Provision for credit losses increased 10.5% year over year to $1.3 billion, primarily due to a reserve build of $30 million compared with a $152 million release in the prior-year quarter, partially offset by lower net charge-offs. However, the reported figure came in below our estimate of $1.5 billion. Synchrony's purchase volume rose 8% year over year to $49.7 billion, supported by broad-based spending growth across credit cohorts and generations. The figure beat the consensus estimate of $49.2 billion and our estimate of $48.5 billion. Interest and fees on loans increased 1.5% year over year to $5.6 billion. The increase was driven by higher average loan receivables. Net interest margin contracted 12 basis points year over year to 15.5% but came in line with the Zacks Consensus Estimate. Average active accounts remained flat year over year to 68.3 million, missing the Zacks Consensus Estimate of 68.8 million and our estimate of 68.9 million. Total other expenses increased 9.9% year over year to $1.4 billion, above our estimate of $1.3 billion. The efficiency ratio deteriorated 330 basis points year over year to 35.9%, which outpaced the Zacks Consensus Estimate of 34.03%. Home & Auto period-end loan receivables increased 2% year over year in the third quarter. Purchase volume rose 9.1% year over year, supported by new programs, select furniture retailers and higher gas prices. Interest and fees on loans rose 0.8% year over year. Digital period-end loan receivables advanced 3.1% year over year. Purchase volume increased 4.8%, driven by strong customer engagement across diversified partners. Interest and fees on loans rose 1.4% year over year. Diversified & Value period-end loan receivables increased 8.5% year over year. Purchase volume increased 12.8%, driven by partner expansion and higher gas prices. Interest and fees on loans increased 3.9% year over year. Health & Wellness period-end loan receivables increased 0.8% year over year. Purchase volume increased 2.7% year over year, supported by growth in Pet, partly offset by lower Audiology and Cosmetic spending. Interest and fees on loans advanced 1.6% year over year. Lifestyle period-end loan receivables decreased 0.6% year over year in the third quarter. Purchase volume rose 5.8%, reflecting new program growth and higher spending in Other Apparel and Goods and Luxury. Interest and fees on loans remained flat year over year at $264 million. Synchrony exited the third quarter with cash and equivalents of $15.9 billion, which increased from the 2025-end level of $15 billion. Total assets of $122.5 billion increased from the 2025-end figure of $119.1 billion. SYF had total liquid assets of $19.5 billion, accounting for 15.9% of its total assets. Total borrowings were $17 billion, up from $15.2 billion as of Dec. 31, 2025. Total equity of $16.6 billion decreased from the 2025-end figure of $16.8 billion. Return on assets declined 70 basis points to 2.9%. Return on equity was 21%, which decreased 410 bps year over year. Synchrony returned $1.2 billion to its shareholders, comprising $1.1 billion in share repurchases and $110 million in common stock dividends. The remaining share repurchases authorization stood at approximately $4.6 billion as of Sept. 30, 2026. Synchrony continues to anticipate mid-single-digit growth in period-end loan receivables. Strong purchase volume growth is expected to continue throughout 2026. The payment rate is expected to remain high. The company now expects full-year 2026 earnings of approximately $9.50 per share, compared with the previously guided range of $9.25-$9.50. RSA, as a percentage of average loan receivables, is increasing, reflecting strong program performance and is expected to remain within the 4-4.5% target range. SYF currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Finance space are American Integrity Insurance Group, Inc. AII, Mercury General Corporation MCY and Robinhood Markets, Inc. HOOD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for American Integrity Insurance's current-quarter earnings of 49 cents per share has remained stable over the past seven days. AII beat earnings estimates in each of the trailing four quarters, with the average surprise being 46.6%. The consensus estimate for current-quarter revenues is pegged at $105.4 million, implying 70.1% year-over-year growth. The Zacks Consensus Estimate for Mercury General's current-quarter earnings of $3.35 per share has remained stable over the past 60 days. MCY beat earnings estimates in each of the trailing four quarters, with the average surprise being 70.2%. The consensus estimate for current-quarter revenues is pegged at $1.6 billion, calling for 8.8% year-over-year growth. The Zacks Consensus Estimate for Robinhood Markets' current-quarter earnings is pegged at 55 cents per share and has witnessed four upward revisions in the past 30 days against one movement in the opposite direction. HOOD beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 15.1%. The consensus estimate for current-quarter revenues is pegged at $1.4 billion, calling for 11.4% year-over-year growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Synchrony Financial (SYF) : Free Stock Analysis Report Mercury General Corporation (MCY) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report American Integrity Insurance Group, Inc. (AII) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Company Announces Quarterly Common Stock Dividend of $0.34 Per Share STAMFORD, Conn., Oct. 20, 2026 /PRNewswire/ -- Synchrony Financial (NYSE: SYF) today announced its third quarter 2026 results for the period ending September 30, 2026. The earnings news release and presentation can be found on the company's Investor Relations website at https://investors.synchrony.com/financial-information/financial-results. Today at 8:00 a.m. Eastern Time, Brian Doubles, President and Chief Executive Officer, and Brian Wenzel Sr., Executive Vice President and Chief Financial Officer, will host a conference call to review the financial results and outlook for certain business drivers. The conference call can be accessed via an audio webcast through the investor relations website at www.investors.synchrony.com, under Events and Presentations. A replay will also be available on the website. The Company also announced that its Board of Directors (the "Board") declared a quarterly cash dividend of $0.34 per share of common stock. The dividend is payable on November 16, 2026 to holders of record at the close of business on November 5, 2026. The Board also declared a quarterly cash dividend on the outstanding shares of its 5.625% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A (the "Series A Preferred Stock"), 8.250% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the "Series B Preferred Stock") and 7.250% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the "Series C Preferred Stock"). Each outstanding share of Series A Preferred Stock and Series B Preferred Stock is represented by depositary shares, each representing a 1/40th interest in a share. Each outstanding share of Series C Preferred Stock is represented by depositary shares, each representing a 1/100th interest in a share. The dividends of approximately $14.06 per share on the Series A Preferred Stock (equivalent to $0.351563 per outstanding depositary share), approximately $20.63 per share on the Series B Preferred Stock (equivalent to $0.515625 per outstanding depositary share) and approximately $1,812.50 per share on the Series C Preferred Stock (equivalent to $18.125 per outstanding depositary share) are payable on November 16, 2026 to holders of record at the close of business on November 5, 2026. About Synchrony Synchrony (NYSE: SYF) is a leading consumer financing company that has been at the heart of American commerce and opportunity for nearly a century. Synchrony delivers credit and banking products that empower tens of millions of consumers to improve their financial lives and access what matters most. Leveraging innovative solutions that are shaping the future of retail commerce, Synchrony supports the growth and success of some of the nation's most respected brands, alongside hundreds of thousands of small and midsize businesses, including health and wellness providers. Committed to excellence in service and culture, Synchrony is honored to be ranked the #1 Best Company to Work For® in the U.S. by Fortune magazine and Great Place to Work®. For more information, visit www.synchrony.com. Contacts Investor Relations: Kathryn Miller (203) 585-6291 [email protected] Media Relations: Ashley Tufts (203) 212-6277 [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/synchrony-reports-third-quarter-2026-results-302912850.html

Image source: The Motley Fool. Tuesday, Oct. 20, 2026 - Senior Vice President of Investor Relations - Kathryn Harmon Miller - President and Chief Executive Officer - Brian D. Doubles - Executive Vice President and Chief Financial Officer - Brian J. Wenzel Operator: Thank you for your continued patience. Your meeting will begin shortly. And a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of your team will be happy to help you. Please stand by. Your program is about to begin. Morning and welcome to the Synchrony Financial Third Quarter 26 Earnings Conference Call. Please refer to the company's Investor Relations website for access to their earnings materials. Please be advised that today's conference call is being recorded. Currently, all callers have been placed in listen only mode. The call will be opened up for your questions following the conclusion of management's prepared remarks. If at any time, you should need operator assistance, please press 0. If you wish to ask a question following the prepared remarks, please press 1. I will now turn the call over to Kathryn Harmon Miller, Senior Vice President of Investor Relations. Kathryn Harmon Miller: Thank you. Operator: You may begin. Kathryn Harmon Miller: Thank you, and good morning, everyone. Welcome to our quarterly earnings conference call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release, detailed financial schedules and presentation are available on our website. Synchronyfinancial.com. This information can be accessed by going to the Investor Relations section of the website. Before we get started, I wanted to remind you that our comments today will include forward looking statements. These statements are subject to risks and uncertainty, and actual results could differ materially. We list the factors that might cause results to differ materially in our SEC filings, which are available on our website. During the call, we will refer to non GAAP financial measures in discussing the company's performance. You can find a reconciliation of these measures to GAAP financial measures in our materials for today's call. Finally, Synchrony Financial is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website. On the call this morning are Brian D. Doubles, Synchrony's President and Chief Executive Officer; Brian J. Wenzel, Executive Vice President and Chief Financial Officer. I will now turn the call over to Brian D. Doubles. Brian D. Doubles: Thanks, Catherine, and good morning, everyone. Synchrony delivered strong third quarter results. Highlighted by broad based purchase volume growth across each of our 5 sales platforms. Spend within our Diversified and Value platform increased 13% compared to last year. Primarily reflecting the impact of partner expansion and higher gas prices. In Home and Auto, purchase volume increased 9% compared to last year, primarily reflecting the performance of new programs, select furniture retailers and the impact of higher gas prices. Purchase volume was 6% higher in our lifestyle platform. Primarily reflecting strength in categories like other apparel and luxury, as well as the impact from our new programs. Meanwhile, digital platform sales grew 5%, driven by strong customer engagement across partners with broad diversified offerings and refreshed value propositions. And in Health and Wellness, purchase volume grew 3% primarily reflecting growth in Pet. Total purchase volume reached nearly $50 billion again this quarter, the highest third quarter level in our history. And an increase of 8% compared to last year. Approximately 53% of that spend occurred through Synchrony's co branded cards in the third quarter. Which increased 23% versus last year was driven by the combination of new programs and product upgrades, delivering enhanced value propositions and increased utility. And higher broad based spend across our card programs. Both discretionary and nondiscretionary out of partner spend on our consumer co brand cards grew by double digits, Strength in discretionary spend came from categories like electronics and entertainment, while in nondiscretionary, gas station and discount store spend grew fastest. And as Slide 3 shows, spend across Synchrony's portfolio is growing fastest among Gen Z and millennials. Particularly in our diversified and value, digital and home and auto platforms. Where the strong value propositions and broad utility of our offerings resonate deeply. The significant growth across the younger age demographics has been enabled by our underwriting and data analytics platform, Prism. Synchrony leverages over 9 thousand data variables and cash flow underwriting to responsibly deliver purchase power to credit ready customers. Even when they are earlier in their financial journeys and often overlooked by other traditional lenders. And because we can meet our customer wherever and however they want to be met, with the right product for that purchase, Synchrony is building relationships and delivering experiences that can unlock greater financial flexibility over time. To that end, we recently introduced CareCredit Pay Later, an enhanced and rebranded installment loan product that will supplement our existing credit card as another way for eligible customers to plan and pay for health and wellness related products and services. It is now available at nearly 20 thousand health and wellness locations including dental, cosmetic, vision and audiology care providers. By providing tailored choices upfront after 1 seamless application, this multiproduct experience empowers customers with financing flexibility, and payment structure optionality that aligns their preferences. In addition, Synchrony and Venmo collaborated on a refreshed value proposition for the Venmo credit card. With an industry first feature that rewards social spending offering cardholders more cash back for splitting purchases with friends on Venmo. Venmo credit card issued by Synchrony delivers unlimited daily cash back deposited directly into the account and offers a simple way to manage money and rewards together. All within the Venmo app. As we all know, the spending experience is constantly evolving. Digital wallets and agentic commerce are changing the way consumers discover, decide and buy. So Synchrony remains focused on the heart of what matters. Connecting our customers, partners, merchants and providers through seamless experiences and unmistakable value. Our new integration with Stripe, the programmable financial services company, will make it easier for both Synchrony's and Stripe's providers in health and wellness retailers to offer CareCredit financing as part of their online checkout experience. More than 12 million CareCredit cardholders, as well as new approved applicants will have opportunities to access trusted care credit financing for health and wellness purchases through participating Stripe providers. Synchrony is also integrating with Vetspire, A leading cloud based veterinary practice management software provider to embed CareCredit financing options directly within Vetspire's AI enabled cloud based platform and gives veterinary practices a more modern way to offer real time payment solutions at the point of care. Vetspire is used by more than 1 thousand veterinary hospitals and clinics nationwide, and about 85% are already CareCredit enrolled providers. By operationalizing checkout workflows and making financial options easier to access, our collaboration aims to improve the experience for pet owners, reduce administrative friction for clinic teams and support timely care for pets. Meanwhile, Synchrony's enterprise collaboration with OpenAI is designed to strengthen our positioning at the center of AI's next chapter in shopping and payments. We have launched our Synchrony Chat GPT plug in, which allows consumers to discover savings and offers within the Synchrony marketplace directly within ChatGPT, and browse promotional financing deals and everyday value from participating partners in a fast conversational experience. And from a corporate perspective, we are deploying the latest OpenAI models, like GPT-4, Astra, to enable deeper engagement with advanced capabilities, more meaningful product development faster technology innovation. Of course, Synchrony's AI strategy extends beyond adopting emerging technologies, to helping define how they will operate across the broader commerce ecosystem. We have joined the Personal Agent Protocol, Poppy initiative, led by Sierra and Meta as a design partner reflecting our commitment to helping define the open standards that will underpin the future of Agentic Commerce. By contributing to the development of secure, transparent and permission based protocols, for AI agents, Synchrony is helping advance an ecosystem that can deliver greater customer choice, trust and scalability across digital commerce. So as we look to the remainder of this year and the years ahead, Synchrony is executing on what we set out to do. We are extending our reach, enhancing the experiences we deliver, and driving optionality for our customers and partners. And as a result, we are delivering attractive growth and strong risk adjusted returns that position us to drive significant long term value for our stakeholders. With that, I will turn the call over to Brian to discuss our financial performance in greater detail. Brian J. Wenzel: Thanks, Brian. Good morning, everyone. Synchrony continued our focused execution and delivered another strong financial performance in the third quarter. We achieved record third quarter purchase volume which grew across all 5 platforms. Ending loan receivables growth continued to accelerate, credit performance remained strong. Resulting in attractive returns for our shareholders. More specifically, we generated net earnings of $892 million or $2.68 per diluted share. Return on average assets of 2.9% a return on tangible common equity of 25.2% and a 6% increase in tangible book value per share. Focusing on our performance in more detail, purchase volume grew 8% versus last year and reached almost $50 billion. The second consecutive quarter at this level while maintaining our disciplined approach to credit. Ending loan receivables increased 3% to $103 billion as higher purchase volume more than offset ongoing effects of elevated payment rates. The payment rate of 16.9% was approximately 60 basis points higher than last year and approximately 180 basis points above the pre pandemic third quarter average primarily reflecting the impacts of new portfolio seasoning shifts in portfolio and product mix and our previous credit actions. Net interest income increased 2% to $4.8 billion primarily driven by the combination of higher interest and fees, and lower interest expense partially offset by lower investment income. Interest and fees increased 1% primarily reflecting growth in average loan receivables. Interest expense decreased 3%, primarily due to lower benchmark rates. Our third quarter net interest margin decreased 12 basis points versus last year to 15.5%, reflecting 3 key drivers. 1, a 20 basis point decrease in our loan receivable yield which was primarily driven by lower assessed late fee incidents resulting from our strong credit performance. Decline in loan receivables yield reduced our net interest margin by approximately 16 basis points. 2, a 62 basis point reduction in our liquidity portfolio yield primarily due to lower benchmark rates. The decline in liquidity portfolio yield reduced our net interest margin by 10 basis points. and 3, a 22 basis point decrease in the mix of loan receivables as a percent of interest earning assets versus last year. This reduced our net interest margin by approximately 5 basis points. These factors were partially offset by a 27 basis point decline our total interest bearing liabilities cost. Primarily due to lower benchmark rates, which contributed approximately 19 basis points to our net interest margin. On a sequential basis, net interest margin increased by 42 basis points primarily due to 2 key factors. 1, the decline in earned income reversals as reversals net charge offs decreased from the seasonal high in the second quarter the seasonal low in the third quarter. This increased net interest margin by 20 basis points. and 2, the increase in the mix of loan receivables as a percent of interest earning assets which increased our net interest margin by approximately 17 basis points. This was generally due to accelerated receivables growth which utilized some of the excess liquidity we held for prefunding in the prior quarter. Next, turn to the remainder of our P and L. RSAs of $1.1 billion were 4.3% of average loan receivables in the third quarter, and increased $72 million versus the prior year. Primarily reflecting program performance. Provision for credit losses increased $120 million to $1.3 billion primarily driven by a reserve build of $30 million versus a $152 million release in the prior year. Partially offset by a $62 million decrease in net charge offs. Other income decreased $22 million to $105 million primarily reflecting the impact of higher loyalty costs resulting in the growth of new programs and refreshed value propositions. Other expense increased 10% to $1.4 billion primarily driven by higher operational losses technology investments and increased marketing expenditures. The third quarter efficiency ratio was 35.9% approximately 33 basis points higher than last year. This resulted from higher overall expenses and the impact of higher RSA. Turning to our portfolio credits on Slide 8. Both our 30 plus and 90 plus delinquency rates at the end of the third quarter were in line with the prior year. Our net charge off rate was 4.79%, reflecting a decrease of 37 basis points from 5.16% in the prior year. And our allowance for credit losses as a percent of loan receivables was 10.01%, a decrease of approximately 8 basis points from 10.09% the second quarter and a decrease of approximately 34 basis points from 10.35% last year. Slide 9 shows Synchrony's funding, capital and liquidity, which continues to be core strength of our business. We grew our direct deposits by $2.4 billion versus last year, and our broker deposits by approximately $575 million. At quarter end, deposits represented 83% of our total funding while secured debt represented 9%, and unsecured debt representing 8%. Total liquid assets increased 7% to $19.5 billion and represented 15.9% of total assets, 33 basis points higher than last year. Turning to capital. Synchrony ended the quarter with a CET1 ratio of 12.9% reflecting a 140 basis point reduction versus last year. A Tier 1 capital ratio of 14.5% reflecting a 100 basis points reduction. A total capital ratio of 16.5%, reflecting a 110 basis point reduction and a Tier 1 capital plus reserve ratio of 24.3% reflecting a 130 basis point reduction versus last year. Synchrony returned $1.2 billion to shareholders during the third quarter. Which included $1.1 billion in share repurchases and $110 million in common stock dividends, At quarter end, we had approximately $4.6 billion remaining of our share authorization. Finally, I would like to discuss our 2026 outlook on Slide 10. Given the performance of our business through the course of this year, now expect to deliver approximately $9.50 in diluted earnings per share for the full year the high end of our original expectations. This reflects our continued full year expectations at year end loan receivables will grow by mid single digits, net interest income will increase, net charge offs will be less than 5.5% with delinquency and losses following normal seasonality. RSAs will be higher for the full year but remain within our long term target range of 4% to 4.5% of average receivables and other expense dollars in the fourth quarter will generally be in line with the third quarter as we continue investing in Synchrony's capabilities and future growth opportunities. To conclude, Synchrony's core business drivers are strong and we remain focused on executing on our strategy Our disciplined approach to growth positions us to deliver consistent market leading returns and we are investing in our competitive differentiation to drive long term earnings power and intrinsic value while also returning significant capital to shareholders. With that, I will turn the call back over to Brian. Brian D. Doubles: Thanks, Brian. Before I turn the call over to Q&A, I would like to leave you with 3 key takeaways from today's discussion. 1, Synchrony is delivering sustainable growth. Our products and experiences resonate across generations and spend categories. Amid a dynamic consumer landscape. Because we are constantly investing in innovation, and evolving with our customers and partners. 2, Synchrony is strengthening our competitive differentiation by positioning us at the forefront of digital commerce. We are prioritizing strategies that embed our financial ecosystem within the ever evolving frontier of commerce. Whether that be at the point of sale, through digital wallets payment processors or agentic purchasing paths. By meeting people wherever they choose to transact, Synchrony is expanding our reach, deepening relationships, and enabling greater choice, trust, and scalability as a leader in the evolving retail ecosystem. and 3, Synchrony is delivering outcomes that matter. We are empowering more than 68 million customers with financial flexibility. We are powering loyalty and sales for the hundreds of thousands of merchants partners and providers we serve. And we are positioning our business to drive consistent market leading returns for our stakeholders. With that, I will turn the call back to Kathryn to open the Q&A. Kathryn Harmon Miller: That concludes our prepared remarks. We will now begin the Q&A session. So that we can accommodate as many of you as possible, I would like to ask the participants to please limit yourself to 1 primary and 1 follow-up question. If you have additional questions, the Investor Relations team will be available after the call. Operator, please start the Q&A session. Operator: Thank you. And as just mentioned, it is star 1 to ask a question. Our first question will come from Ryan Nash with Goldman Sachs. Please go ahead. Ryan Nash: Hey, good morning, guys. Brian D. Doubles: Hey, Ryan. Brian J. Wenzel: Good morning, Ryan. Ryan Nash: So Brian, if you look at the implied Q4 EPS guide, I think it points to a little bit of downside versus Street expectation. So maybe can you just help us with a bridge for where you think the market's off, whether it is DPNR or allowance? And given how the market outlook has shifted, do you still see a path to double digit EPS growth next year? Thank you. Brian J. Wenzel: Yes. Thanks for the question, Ryan. Let me just start with we began the year with the range of $9.10 to $9.50, right, which preceded a war in Iran, preceded the higher gas prices that Americans are feeling today, preceded inflation accelerating and preceded a rise in the Fed funds rate. So here sitting here today with a $9.50 full year rate, we actually feel good about the performance with that backdrop, right, which is ahead of again, depending upon which service you use in $9.38 to $9.40, consensus estimate for the full year. So when we look at it, we think that obviously this is a an increase rate relative to the performance of the business. Again, we are pleased about it. I think consensus when you look at it between Q3 and Q4, the cadence on reserve was probably off. And I am not sure people thought through enough about how the loss trajectory was moving Q3 and Q4. So again, I think that is the biggest delta as you think about how what the estimates are for Q4 versus Q3. So again, we feel good about the year. When you think about next year, we are not going to get into 2027 guidance on this call, Ryan, so I can appreciate that for a second. But when you think about it, I guess the framework kind of remains the same, right? We want to be able to grow NII, which hopefully will mirror loan growth I think you do get some benefit from the new portfolio seasoning. Year over year. And then again, I think next year, hope not to comp the operational losses and drive more operating leverage in there. Again, you will have some higher probably net charge offs. But again, taking all things equal, that combined with our capital return policy should give us a framework to get to double digit EPS growth next year. Ryan Nash: Got you. And then if I look at the payment rate, you mentioned in your remarks Brian, it is up 60 bps year-over-year, it is almost up 200 versus the pre pandemic. So maybe just sort of talk through the impacts on loan growth margin and credit, if we continue to see an elevated payment rate. And are there any steps you can take to ease the pressure? Or do you think it will naturally adjust just given these portfolio's seasoning impacts? Thank you. Brian J. Wenzel: Thanks, Ryan. So when I think about the 60 basis points year over year change, if you pull that apart for a second, over 90% of that or 56 basis points is really mix related. And inside that 56, you have 35, which are the new portfolios, and 8, which really comes from lower promotional balances. So it is really a mix issue when I think year over year. Your point about pre pandemic the challenge that we have today is we are sitting down a couple of 100 basis points lower on non prime. We have lower percent of promotional assets, which is really impacting stickiness and the conversion from sales into assets. I think as we move forward, we would expect as credit probably more normalizes, right? So you slide up into the 5.5% to 6.0% we would expect to see a little bit more non prime in the book, not higher than pandemic period, but more normal for us. Think we want to see promotional balances begin to take hold, which really goes back to consumer confidences. Or consumer confidence, excuse me. When I look inside this quarter though, we did see green shoots When I look at dental, which had been flat through the second quarter, that was actually up year over year. Home specialty was up year over year. Select furniture is up year over year. And then when you look at overall smaller discretionary purchases, they continue to increase. We are we do have some headwinds, right, in power and cosmetic. Audiology. But again, I think we see green shoots, which will help promotional asset percent rise. So those are some of the biggest factors, Ryan. And think we just got to be patient with how the portfolio returns back to what was the closer to the pre pandemic period Thank you. Operator: Our next question will come from Sanjay Sakhrani with KBW. Please go ahead. Sanjay Sakhrani: Hey, good morning. Brian J. Wenzel: Brian Wenzel, you kind of walked through all the different, aspects of what is changed over the course of the year. Sanjay Sakhrani: And I am just curious and this is probably even more question for Brian D. Doubles. But when we are thinking about the health of the consumer and the state of the consumer, the credit numbers look really strong. And obviously, provisions as such is there anything underneath it that you are seeing that is putting that is weighing on the consumer? Anything that concerns you given all these pressures? Just curious to get a sense of what is happening on the front lines. Thanks. Brian D. Doubles: Yes, Sanjay. Look, I would say we still feel really good about the trends we are seeing at the moment. The consumer continues to show signs of strength. I think it is been a little bit surprising. Not only to us, but to the industry more broadly. I think higher gas prices fairly broad based inflation, And then you look at consumer confidence that has been weak all year, but it is not impacting. None of those factors are really impacting consumer behavior. So I think strong labor market, decent wage growth, there are some natural offsets there. Consumers continue to spend through it. As you mentioned, credit looks really good. We started to open up a bit earlier in the year just given how good credit was looking. We think that will drive some nice growth for us as we get into next year. But yes, we are really happy with purchase volume up 8%. We gave you by credit cohorts. We gave you some data by generations, millennials, Gen Z looking really good. So we are really not seeing any signs of stress at the moment. And I think that is fairly consistent across the industry. Yes. Brian J. Wenzel: Sanjay, what I would add in, just 2 points. To augment what Brian just said. First, when you look at payment rate and we look at payment rate by credit grade, when I look at the non prime the payment rate for non prime is up 40 basis points quarter on quarter. that is the same rate it is up on the 780-plus. So again, we are seeing very good payment rates and strength in the consumer. Alberto inside of our affordability issue for some. So that is number 1. And I think number 2, you see it on spending behavior patterns, show on Page 3 of the deck that again, we see strength there and that is continued on And maybe I will just add, the fourth thing is or third thing is, when you look at entry rate, entry rate continues to be better than 2018. Into delinquency and better than a couple of years ago. A lot of that is our pre delinquency strategies as well as our credit action. So again, when you look at it spending, when you look at it from payment rate and you look at entrance delinquency, they all continue to show strength. Thank you. Sanjay Sakhrani: And just my follow-up question. Obviously, a bunch of announcements you guys made around Agentic and working with a lot of the players that are involved. I am just curious because there is been just a lot of chatter on the back of the launch of Muse. Just how you guys see Agent e commerce sort of affecting private label because there is all this talk about gamification of rewards and optimization of financial products. I am just curious how you think it plays out for private label and Synchrony? And obviously, you guys are doing things. Beyond the offensive. Yes. Brian D. Doubles: Obviously, that is a big area of focus for us. I think Agentic is going to fundamentally change how consumers discover products. Research, ultimately purchase I think we have got a jump start on this. it is still very early, but we are working with all the leading AI platforms. We need to make sure that as that purchasing path changes, that our products are embedded in that experience. And I think, look, frankly, our partners have been very helpful here. They are pulling us into those discussions. They have got a big incentive to ensure that our cards are embedded in whatever that experience is because they wanna make sure that obviously, their customers get the benefit of the value prop they get the benefit of any discounts or offers that we have on our cards, they want to make sure that their RSA is protected. So obviously getting more complicated. But we are really excited about the longer term opportunity here. I think ultimately, it is going to make it easier for consumers to use our products. I think shopping agents will be able to program certain purchases to use our cards. I think that reduces some of the historical friction that we have had. And I think that transparency overall benefits us. We think our products provide great value. Typically more savings, better discounts, better offers and general purpose cards. And so we think if we can remove that friction in the process, that ultimately advantages us over time. Thank you. Brian J. Wenzel: Thanks, Sanjay. Brian D. Doubles: Thanks, Sanjay. Operator: Our next question will come from Moshe Orenbuch with TD Please go ahead. Moshe Orenbuch: Great, thanks. Thanks for the incremental detail on volume growth by segment. And it is kind of interesting to see the acceleration in prime And I am just wondering if you could kind of talk about whether that is driven by product mix or by different types of marketing or activation? And what you think that means in terms of revolve rates or anything else that might happen as you do get to your balance growth targets? Brian J. Wenzel: Yes, thanks for the question Moshe. You know, It is somewhat product related. When you think about dual card being a larger percentage of the book, they tend to be people who are going to be 86 plus Vantage score. So in the prime segment to super prime. So again, I think that is driving some of the behavioral patterns. But again, across the spectrum, 1 of the questions about our business is are you attracting Gen Z and millennials into the book? And we clearly are, but they are on the same type of band, albeit at a higher rate. Given the smaller balance than that. So again, I think when you think about that payment behavior pattern, spending behavior pattern, the product is driving some of it. The more we push into pay later, for us, pay later is a higher ticket than most, what I would say, buy now, pay later providers offer. So it is a combination of product, really. Got it. Moshe Orenbuch: And kind of shifting gears to the follow-up question. Combination of technology investments and operational losses and kind of pushed your efficiency ratio higher. Can you talk about each of those and how you see at what point do they sort of level off Or is it just a question of revenue growth rates accelerating to match them? Like how do you think about each of those in the context of efficiency over the course of the next year or so? Brian J. Wenzel: Yes. Let's break it 2 pieces. When I think about the operational loss piece for a second, Moshe, we came off a year that was probably our best year ever as a company. This year, we expected some level of increase from that. We were impacted by a number of idiosyncratic events, which sometimes happen when you either launch new partners make changes, etcetera. But we feel we have that contained. Now unfortunately, with idiosyncratic events, you do have a tail which has played through the entire year. I would say that the team has implemented well over 100 strategies to mitigate operational losses going forward. So we expect that mitigation to happen in 2027 and kind of come down. On the technology front, we were at a place where Moshe made a lot of sense for us to make investments given the acceleration, whether it is AI, cloud, our push into digital wallets, pay later product, it just made sense that we had to position the business for the long term value intrinsic value of the company. So we decided to make those investments. We think they are the right investments and will better service our area over the medium and long term. So, again, I would not expect that to continue to grow at an exponential rate, but it is going be a slightly elevated most certainly this year into next year. And then I think you will begin to see a tail off beyond that. Tail off from a growth rate perspective, Moshe. Thank you. Operator: Our next question will come from Terry Ma with Barclays. Please go ahead. Terry Ma: Hi, thank you. Good morning. Brian J. Wenzel: Just wanted to follow-up on the payment rate. You called out new program seasoning as 1 of the key drivers. Can you maybe just give us a sense of where we where you are the seasoning cycle for those new programs you had in the last year? And at what point that dynamic reverse and turn into a tailwind for receivables growth and earnings growth? Yes. Good morning, Terry. I think about obviously the largest 1 is our 1 Pay Walmart portfolio, and that really takes about 3 vintages in order to kind of get this to a more steady state. So this would be effectively the end of that first vintage at the end of 26. So we are probably in that first third again, I think you see some of the effects mitigating in the P and L as you step through year 2 and year 3. The other portfolios that we have in there are much smaller. I mean, obviously, Raymour & Flanigan has a very different payment rate Lowe's commercial has a much more accelerated payment rate. So again, I think that they are going to vary a little bit. I still expect, we are very pleased with the growth that we have seen in Walmart. Given the number of customers they serve and their presence in the retail ecosystem. So again, we continue that growth and then hopefully as you step through these vintages, the translation between sales and assets begins to narrow for those new portfolios. Terry Ma: Got it. Thank you. And then just on agentic commerce, can you just talk about what the ultimate opportunity is for Synchrony? Is it primarily about protecting your existing position at checkout? Or is there an opportunity to expand and acquire customers outside traditional channels? Brian D. Doubles: Yes. Look, I think it is a big opportunity for us. And touched on it briefly. But there is a couple things that I think naturally advantage us here. First, it is just going to make it easier to use our cards. You know, 1 of the go back over time. You know, 1 of the friction points just in co brand and private label has been the consumer forgets their card. Do not want to go through the process to look it up. Or they do not have it stored in a mobile wallet. This makes that easier. If you could actually program an agent to say, hey, I am shopping at x partner And anytime I shop with that partner, use this card, so I get my 5% off. That makes that process so much easier than it is been historically. So I think that is 1 big advantage that we see going forward. I think the other thing is our products provide great value. And I think you are going to have these personal agents doing the comparison for consumers in terms of which card they should use It will be a combination of factors, but 1 of those factors is going be what offers are available to me, what is the first purchase discount, or what is my everyday cashback, And we think all of our products are really advantaged in that comparison, if the agent is able to provide that level of transparency, we think that naturally advantages our business model our products and our partners. So I think those are the 2 big things that we see, at least in the short term. Thank you. Operator: Our next question comes from Don Fandetti with Wells Fargo. Please go ahead. Don Fandetti: Good morning. Brian D. Doubles: Can you talk a little bit about the competitive environment from your sort of legacy lending or bank competitors and then also the digital side? And whether or not you feel like you need to make any bolt on acquisitions or is there any portfolio opportunities out there? Yes. I think, look, the competitive dynamics have been pretty consistent for the last 3 or 4 years, frankly, both in terms of the number of competitors who we see out there competing on RFPs in the traditional stuff that we do. If anything has changed, would say, over the last 2 years, it is in the, what I would call, nontraditional partner base. So we just announced a relationship with Stripe. that is obviously, they are a payment processor. They are not a retailer. I think that is kind of the new frontier as we go out and seek the 1 to many distribution channels for our products. So I think that is probably the nuance I would say the competitive set, as we are out there competing for business with merchants and providers, that is been pretty consistent. I would say the competitive dynamics in terms of returns and price continues to be pretty rational. I think part of that is driven by just a little bit of uncertainty as you look out into 2027 and 2028. So I think most issuers are being pretty disciplined around how we are bidding on stuff. I think, you know, we are clearly being successful. We renewed a ton of programs. We won a bunch of new programs this year. So I feel pretty good about that. Then on your second question, in terms of M&A, look, we continue to be really disciplined. You have seen that for the last decade, We like to buy companies that are relatively small that we think we can grow leveraging our scale. there is obviously there is been a lot more bad M&A done historically than good M&A. And we fully appreciate that and we are pretty disciplined buyers in that. Will continue. Got it. Don Fandetti: Thank you. Brian J. Wenzel: Thanks. Thank you. Operator: Our next question will come from Jeff Adelson with Morgan Stanley. Please go ahead. Jeff Adelson: Hey, good morning. Thanks for taking my questions. Was just wondering I just wanted to focus on the RSA a bit. It did step down a bit more than we were expecting this quarter. Think in especially it was notable in light of the better operating and credit results you put up this quarter. I was just wondering, is there anything under the hood that maybe drove this quarter's stronger RSA? And maybe just help us how to think about that trajectory going forward from a quarterly cadence perspective. Brian J. Wenzel: Yes. Good morning, Jeff. When I look at the RSA, traditionally, people try to look at it externally when you think about PPNR minus net charge offs minus the R RSA? And how does that percentage work? And generally speaking, it stays within a certain range. Now what drives it inside that range is really the mix of the portfolio. So while credit. You know, you look at credit at the top of the house, depending upon credit where credit sits in 1 partner versus another has a slightly different impact. That flows through. So mix generally is the biggest driver. there is been no substantive changes to any of the agreements that would drive a structural change to the RSA. Etcetera. So it is really just more mix. Again, when I look at it, it operates in inside of what we think is a normal range. When you look at that metric, you can also look at it, Jeff, as a percentage of total purchase volume. Because again, there are portions of it that is driven by volume itself. And that has a more steadying effect. But again, consistent with typical ranges we see for the RSA. Jeff Adelson: Okay. Thanks. And then just with rates stepping up here, can you just walk us through how you are thinking about the impact on your consumer at this point? I know from a NIM perspective, if you look at your 10 Q, you are slightly you are more neutral, but you are slightly seeing a benefit there to your NIM. But I know in the past, you have talked about above neutral rates as a reason to stay tighter on your underwriting box. With regards to the consumer. So just are you thinking about the impact of rates you are stepping up on your consumer in the credit quality into next year? Brian J. Wenzel: Yes. When you think about it, Jeff, majority of the financial obligations for consumers are fixed obligations, right? What do think about autos, mortgages, even though there is some more we said, you know, mortgages that we set over the last couple of years. But again, that is certainly fixed. So you do not see a direct impact to a consumer that flows through more immediately. it is the effects over time that happen. And broadly speaking, the interest rate environment can have a bigger effect on employment when you think about small and medium sized businesses that may not have access to capital, etcetera. Certainly, if mortgage rates stay elevated, the mortgage the home the home housing market kind of slows down, you are going to see inflationary pressures through the housing, through rental rates that will go up. So kind of have a circular benefit there. And obviously, we benefit when there is a good and vibrant home sale market because people are willing to invest in furniture and other things as that goes through. So again, there is more, I would say, ancillary effects to the consumer than direct effects to the consumer. From that rise in interest rates. With regard to our positioning, right, we are generally neutral When I think about the interest rate, you think about what happens to our interest bearing liability costs, but then look at the primary changes, the investment and a merchant discount where rates get passed on to some of the providers or merchants. that is generally neutral. There are some lag effects when you are going up. That can impact you. But again, I think over long term, the bigger question becomes when you think about deposits, what is going to happen with betas. And we probably think that given this competitive environment, betas will be higher than the pass rate hiking cycle given the competitive dynamics in the fight over deposits you are seeing today, particularly with a lot of promotional pricing. So that could have an effect. Again, we will be back in January to talk more about those assumptions. Thank you. Operator: Our next question will come from Darrin Peller with Wolfe Research. Please go ahead. Darrin Peller: Hey, guys. Thanks. Just a follow-up for 1 more minute on NIM. Mean, you think about fourth quarter, just if you could just give us a sense of how to frame some of the puts and takes the loan yield and funding costs. So obviously, lot questions around the path of future hikes that we just touched on, and you saw broader improvement this quarter. But again, deposit betas may shake out on the way up this time. Maybe a little more color in specifics on that would be helpful. Brian J. Wenzel: Yes. Thanks for the question, Darrin. We do have 1 more rate increase in the back half of the year, but coming I am sorry, the remainder of the year coming in December, of this year. When I think about NIM generally for the fourth quarter, again, we have indicated that NIM will increase quarter on quarter. A good chunk of that is going to obviously be the AEA mix You are going see more loan receivables as part of the equation that you did in the third quarter. So that will give you a benefit When I particularly think about the interest side of that, so thinking about that interest expense, the primary increase that flow through really in November and December merchant discount. there is a slight negative to NIM in the quarter, but it is not really material Where you are going to see some benefit is really on core lines of interest and fees. So again, with losses being a little bit more moderated, you should see a benefit. Again, we expect it sequentially to increase. Darrin Peller: All right. that is great. And then just a quick follow-up. there is been elevated tech operational spend as you have ramped Walmart, 1 Pay and other new partners. Employee costs have been up only 1% to 2% over the past few quarters. So maybe just talk a little bit more about some of the internal efficiency initiatives, how they are continuing more broadly in the expense base now? Brian J. Wenzel: Yes. You are right. When you think about the employee cost being up 1%, I think 1 of the things we have been focused on as a company is how do we introduce productivity into large portions of the business, some of which is very small portion is AI driven when you think about utilization of the call center for call taking or call summaries. At the end or driving efficiencies inside of that. So we have been generally headcount neutral to down as a company from an employee base perspective, which we think is a good place to be as we try to drive that productivity. Technology spend, Darrin, though, I would sit back and say, it is not necessarily Walmart related. If you think about it, we are in we are closing out year 2 of a 3 year journey on cloud. We want to accelerate our investment in AI. We have invested more in some of the wild technology, some of the things like Brian referred to Stripe earlier. Being about these digital wildsets is a really important part of Agenza Commerce Our continued building out of the Pay Later product, things like that, that are driving in our pre qual process, things like that are driving more technology build than I would say the year integration a new partner. So those are investments that we think pay off here. We hope in the short term, but more in the medium to long term that drive the intrinsic value of the company. And that is why we have to make those investments that they are prudent. And again, that should decelerate honestly next year, but as a growth rate, it will decelerate hopefully 2020 and beyond. But again, we want to invest technology we think by maintaining a flat headcount and driving some of that efficiency there, can we can fund those investments. Thank you. Operator: Our next question will come from Mihir Bhatia with Bank of America. Mihir Bhatia: Hi, good morning. Thank you for taking my question. Wanted to go back to, I think, earlier in the Q&A, mentioned, Brian, that reserve and loss cadence was the main difference. In the fourth quarter outlook. Can you talk a little bit more about that? Is that a step up in higher seasonal charge offs more for reserve build? And then just maybe if you can also just touch on allowance coverage in that. I think typically you get 30-40 bps of allowance coverage benefit in the fourth quarter. Should we expect something similar here Just give us a starting point we head into 2027 allowance coverage. Thanks. Brian J. Wenzel: Yes. Good morning, Garen. Thanks for your question. My point earlier was really the reserve covers, not necessarily the charge off piece that I was referring to on a cadence between Q3 and Q4. So that is the first point. The second point, as you think about the coverage ratio, particularly in the fourth quarter, you are right, there is a seasonal element. And typically, you see a decline, probably not as wide as what you would say. You say it is probably more in that 25-basis-point range depending upon the more relevant time period about 25 basis points. Again, given where we are at the end of the third quarter, and probably the maturation of some of the new portfolio seasoning, some of the credit action seasoning, you should not expect that same type of seasonal decline in coverage rate in the fourth quarter, be significantly less than that. But again, it will be a post for the quarter But again, not as low on the seasonal decline of the rate. that is not necessarily a negative thing. I think it just kind of goes into how the loss rate will begin to build between 2026 to 2027 as anticipated as Walmart losses begin to come online. And again, the credit actions we took in the end part of last year begin to season and mature and come through the portfolio. So again, we are pleased with the coverage. And as I have indicated throughout the year, we generally thought that the rate had a downward bias to it. This is all taking to assumption that we do not have any deterioration in the macro or any significant improvement in the macro, it is kind of a steady state is kind of how we are thinking about it right now. Got it. Mihir Bhatia: Thank you. And then just following up on the deposit data. Comment. I think you said you expect deposit beta to be higher this cycle. But it is with a lag. Just as we think about the double digit EPS framework, if you will, for next year, That assumes some expansion from portfolio seasoning. So how much of higher deposit betas were offset that? Or is that already in the framework, if you will? Brian J. Wenzel: Yes. Right now, here we are going through our 2027 plan and formulating what we think the betas will be for finalizing what we think the betas will be for next year. And again, the extent that the banners are higher, we are going to have to figure out a way in which we can continue to drive. We are focused, Brian and I and the executive team on driving double digit EPS growth Most certainly, we try to do it annually, but that is going to be a focus on the find ways to potentially offset any headwinds that it comes from higher deposit competitive environment. Thank you. Operator: Our next question will come from Rob Waldhack with Autonomous Research. Please go ahead. Rob Wildhack: Hi, guys. Looking at some of the segment level data, purchase volume, loan growth, etcetera, in most of the segments actually accelerated from the second quarter. Except for digital. And from Q1 to Q2, the digital segment accelerated itself pretty nicely. So I am wondering if there is anything to call out respect to digital this quarter and why the slowdown there? Because if that had held in, I think the loan growth and especially purchase volume would have looked even better. Brian J. Wenzel: Yes. As you think about the digital, there is time Brian talked about Venmo. there is timing when you have value property launches and when things happen. Occur from a marketing cadence perspective. So I do not think there is anything structural or different in there. We just have a tremendous opportunity inside of that sales platform when you think about partners like Amazon, when you think about partners like PayPal that is in there and other positions, Again, it is it is probably just more timing of some of those campaigns and value property pressures than it is something that is structural or fundamentally different. Brian D. Doubles: And we did in the third quarter last year. We did a fairly substantial upgrade in the PayPal book to the co brand card. And I think that drives some growth. So that is in the comp year over year. Rob Wildhack: So it is all value comp driven? Okay, great. And then I appreciate all the comments on AgenTek commerce, the friction and the value prop. The pushback that we get sometimes from clients is around the risk that agents have consumers optimizing to the point where they are squeezing every dollar from the card in of rewards, but also revolving less or managing credit better. Do you think that is a real risk too? Brian D. Doubles: Yeah, look obviously we are spending time on it I think the first thing I would say is there is a lot of transparency around APRs today. There always has been. And I think there is a lot of factors that go into how consumers pay down their outstanding balances. So they are not just looking at credit card APRs, they are looking at all the fixed expenses that Brian mentioned, mortgage, rent, payments, car loans, And then when you look at just credit cards generally, consumers, they look at more than APR. They look at where do I wanna make a payment to create some utility in the short term. That tends to be on their top of wallet. General purpose card, not necessarily on our products. So obviously, we are to stay very close to this as it evolves. But I still see Agentic broadly as a big opportunity for us. And transparency broadly benefits us just given the value that we provide on our card. So overall, I think we are positively biased on this and think it is an advantage for us over the long term. Thank you. Operator: Our next question will come from John Pancari with Evercore. Please go ahead. John Pancari: Hey. Good morning. This is Troy Sweeney on for John. Just wanted capital. Clearly, you remain active on the repurchase front. CET1 progressing lower, but still a sizable cushion between the 9 coming out of Q3 and 11% target. I know Unreal's losses are not really factored to report in CET1, but just given elevated yield backdrop, is there any change in how you are thinking about repurchase appetite and broader progress towards your 11% target? Brian J. Wenzel: Good morning. No, I would say we do not have any changes in our conviction and the cadence in which we would we would get closer to target. I think we have consistently said we wanna be aggressive, but prudent given the macro environment. We got $4.6 million remaining under our current authorization, and we are going to continue to execute that The only thing I would say is I know we do not give quarterly guidance I would not read into the third quarter that is a new run rate. Think if you look at the more historical average, it is probably a better sense on what we will do. But again, we and want to get down to it. I think we have made very meaningful progress from where, you go back, We are at 14.3% on CET1 A year ago, we are down 12.9% and we are growing assets. So again, we like to grow assets first, but to the extent that we have excess capital, we will deploy it again share repurchases on aggressive but prudent nature. Thank you very much. John Pancari: Thank you. Thank you. Operator: We will take our last question from Andrew Bauch with BMO Capital Markets. Please go ahead. Andrew Bouch: Hey, thank you for taking the question. A lot of my questions have been asked so far, but maybe if I could ask you to paint with some broad strokes on how you kind of expect the holiday shopping season to shape up. Any behaviors that you are seeing from merchants that are different from prior years? Special promotions that may be going on, just whatever you are seeing in the market today? Brian J. Wenzel: Yes. Thanks for the question, Andrew. I will start out and then if Brian has other comments. Obviously, the first thing that we watch is whether or not consumer behavior rate confidence as they go in, what they are spending pattern is going to be. I think NRF has a 4 percentage point increase in the in holiday sales that are kind of coming through. I think the first read for us is when we look at the first 3 weeks albeit a small sample size, sales have continued at generally the same rate as we have seen as we exited the third quarter. So I think the consumer continues to be strong. I think the 1 positive for us is that we have a set of retail partners that are very attractive and offer strong offerings to consumers. And they are gearing up for what would be a slightly higher promotional activity level across the board here as they fight for dollars. We have seen the trend in last couple of years where things have moved a little bit earlier in the cycle. Into pre black Friday and pre Thanksgiving week. So again, we will continue to watch it. I think we feel cautiously optimistic about holiday growth rates. But again, early signs from the consumer is not tapering off. And again, some will begin to start spending here in October. So we feel generally, again, cautiously optimistic with our partners and how they will develop. Brian D. Doubles: Yes. I would not add much, other than say that our teams are embedded with all of our partners actively working on a pretty robust schedule of holiday offers, promotions, discounts. We are very focused. We do that hand in hand with them, with our teams that are embedded with them every day. To Brian's point, I do think I do think they are cautiously optimistic. They are looking at sales trends in October and probably weighting that a little bit more heavily than what they are seeing in terms of the headline on consumer confidence. As I mentioned earlier, for 1 of the first times that I can remember, those 2 things are pretty disconnected. So if you are looking at consumer confidence, you do not feel great. But when you look at what the consumer is actually doing, you feel a lot better. So we are actively working with them on marketing calendar promotions and offers. And I think we are we also share their cautious optimism for holiday. Andrew Bouch: Great. Thank you, Thanks. Brian D. Doubles: Thank you. Brian J. Wenzel: Have a good day. Operator: Ladies and gentlemen, this concludes Synchrony's earnings conference call. You may disconnect your line at this time and have a wonderful day. Thank you. Before you buy stock in Synchrony Financial, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Synchrony Financial wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. Synchrony Financial is an advertising partner of Motley Fool Money. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Synchrony (SYF) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Synchrony (SYF) came out with quarterly earnings of $2.68 per share, beating the Zacks Consensus Estimate of $2.48 per share. This compares to earnings of $2.86 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.07%. A quarter ago, it was expected that this consumer credit company would post earnings of $2.08 per share when it actually produced earnings of $2.59, delivering a surprise of +24.52%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Synchrony, which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $4.81 billion for the quarter ended September 2026, missing the Zacks Consensus Estimate by 0.56%. This compares to year-ago revenues of $4.72 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Synchrony shares have lost about 11% since the beginning of the year versus the S&P 500's gain of 12.4%. While Synchrony has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Synchrony was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.04 on $4.96 billion in revenues for the coming quarter and $9.40 on $19.05 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the bottom 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, WisdomTree, Inc. (WT), has yet to report results for the quarter ended September 2026. The results are expected to be released on October 30. This company is expected to post quarterly earnings of $0.30 per share in its upcoming report, which represents a year-over-year change of +30.4%. The consensus EPS estimate for the quarter has been revised 0.8% higher over the last 30 days to the current level. WisdomTree, Inc.'s revenues are expected to be $181.31 million, up 44.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Synchrony Financial (SYF) : Free Stock Analysis Report WisdomTree, Inc. (WT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in Synchrony Financial? Here are five stocks we like better. - Strong operating performance: Synchrony's third-quarter net earnings reached $892 million, or $2.68 per diluted share, while purchase volume rose 8% year over year to nearly $50 billion. Loan receivables grew 3% to $103 billion, with growth recorded across all five sales platforms. - Credit trends improved, but expenses increased: The net charge-off rate declined to 4.79%, while payment rates strengthened. However, other expenses rose 10% to $1.4 billion due to operational losses, technology investments and higher marketing costs, pressuring the efficiency ratio. - Outlook and shareholder returns strengthened: Synchrony raised its full-year earnings outlook to approximately $9.50 per share and maintained expectations for mid-single-digit loan growth and net charge-offs below 5.5%. The company returned $1.2 billion to shareholders during the quarter, including $1.1 billion in share repurchases. - OneMain's Yield Comes With a Catch Synchrony Financial (NYSE:SYF) reported third-quarter net earnings of $892 million, or $2.68 per diluted share, as purchase volume reached nearly $50 billion and rose across each of the company's five sales platforms. The consumer finance company said total purchase volume increased 8% from a year earlier, marking its highest third-quarter level on record. Ending loan receivables grew 3% to $103 billion, while net interest income increased 2% to $4.8 billion. → Berkshire Just Backed This Little-Known Stock—Should You Chase It? - MarketBeat Week in Review – 06/08 - 06/12 Chief Executive Officer Brian Doubles said approximately 53% of third-quarter spending occurred through Synchrony's co-branded cards, where purchase volume increased 23% year over year. Growth reflected new programs, product upgrades, higher broad-based spending and increased utility for cardholders, he said. "Both discretionary and non-discretionary out-of-partner spend on our consumer co-brand cards grew by double digits," Doubles said, citing electronics and entertainment in discretionary spending and gas stations and discount stores in non-discretionary categories. → These 3 Green Stocks Have a Growth Story That Goes Far Beyond Washington - Synchrony's Comeback Is Hiding in Plain Sight Synchrony reported purchase-volume increases in all five of its sales platforms. Diversified & Value spending rose 13%, driven primarily by partner expansion and higher gas prices. Home & Auto volume grew 9%, aided by new programs, select furniture retailers and higher gas prices. - Lifestyle purchase volume increased 6%, reflecting strength in other apparel, luxury and new programs. - Digital sales grew 5%, supported by customer engagement among partners with diversified offerings and refreshed value propositions. - Health & Wellness purchase volume rose 3%, primarily due to growth in pet-related spending. Doubles said spending growth was strongest among Gen Z and millennial customers, particularly in the Diversified & Value, Digital, and Home & Auto platforms. He said the company uses its PRISM underwriting and analytics platform, which incorporates more than 9,000 data variables in cash-flow underwriting, to extend purchase power to credit-ready customers. → Broadcom's CEO Sees Years of AI Demand But Warns of a Bigger Threat to the Boom During the quarter, Synchrony introduced CareCredit Pay Later, a rebranded installment-loan offering that is available alongside the CareCredit credit card. The product is now available at nearly 20,000 Health & Wellness locations, including dental, cosmetic, vision and audiology providers, according to the company. Synchrony also refreshed the Venmo Credit Card value proposition with a feature that provides more cashback for cardholders who split purchases with friends on Venmo. The card provides daily cashback deposited directly into customers' Venmo accounts. The company highlighted several technology partnerships aimed at expanding financing access within digital commerce. Synchrony said its new Stripe integration will enable participating Health & Wellness providers and retailers using Stripe to offer CareCredit financing during online checkout. It also announced an integration with veterinary practice-management software provider Vetspire to embed CareCredit financing within Vetspire's platform. Vetspire is used by more than 1,000 veterinary hospitals and clinics nationally, and Synchrony said about 85% of those providers already accept CareCredit. Doubles said the company launched a Synchrony ChatGPT plugin that enables consumers to discover Marketplace savings and offers within ChatGPT. Synchrony is also deploying OpenAI models, including GPT-6 Astra, and has joined the Personal Agent Protocol initiative led by Sierra and Meta as a design partner. In response to questions about agentic commerce, Doubles said the company believes shopping agents could reduce friction for cardholders by allowing consumers to program preferred cards for purchases with specific merchants. He also said greater transparency around discounts, offers and rewards could benefit Synchrony's products. Chief Financial Officer Brian Wenzel said the company's net charge-off rate declined 37 basis points from the prior year to 4.79%. Its 30-plus-day and 90-plus-day delinquency rates were in line with the previous year, while the allowance for credit losses stood at 10.01% of loan receivables, down from 10.35% a year earlier. Wenzel said the payment rate was 16.9%, about 60 basis points above the prior year and about 180 basis points above the pre-pandemic third-quarter average. He attributed more than 90% of the year-over-year increase to portfolio mix, including new programs and lower promotional balances. Net interest margin declined 12 basis points year over year to 15.5%, reflecting lower loan-receivable yield, lower liquidity portfolio yield and a smaller mix of loan receivables within interest-earning assets. Those factors were partly offset by lower funding costs. Sequentially, net interest margin increased 42 basis points. Other expenses increased 10% to $1.4 billion, driven by higher operational losses, technology investments and marketing expenditures. The company's efficiency ratio rose about 330 basis points year over year to 35.9%. Wenzel said Synchrony had implemented more than 100 strategies to mitigate operational losses and expects those efforts to contribute to lower losses in 2027. He also said technology spending would remain elevated as the company invests in cloud capabilities, artificial intelligence, digital wallets and its pay-later product, though growth in those expenditures is expected to decelerate over time. Synchrony raised its full-year outlook to approximately $9.50 in diluted earnings per share, the high end of its original guidance range. The company continues to expect year-end loan receivables to grow by mid-single digits, net interest income to increase and net charge-offs to remain below 5.5%. The company expects retailer share agreements, or RSAs, to be higher for the full year but remain within its long-term target range of 4% to 4.5% of average receivables. Fourth-quarter other expense dollars are expected to be generally in line with the third quarter. Synchrony returned $1.2 billion to shareholders during the quarter, including $1.1 billion in share repurchases and $110 million in common-stock dividends. Its common equity Tier 1 ratio ended the quarter at 12.9%, and the company had approximately $4.6 billion remaining under its share repurchase authorization. Management said early holiday-season spending trends remained consistent with the pace seen at the end of the third quarter. Doubles and Wenzel said the company and its retail partners were cautiously optimistic about holiday demand, while preparing a schedule of promotions, discounts and offers. Synchrony Financial (NYSE: SYF) is a consumer financial services company that provides private-label credit cards, co-branded credit cards and promotional financing programs. Its financing products are offered through retailers, manufacturers, healthcare providers and other businesses, helping consumers pay for purchases over time. The company serves a range of industries, including digital commerce, home improvement, furniture, automotive, healthcare, jewelry, apparel, electronics and specialty retail. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Synchrony Financial (SYF) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.