RBC Capital has trimmed its price target on Synchrony Financial (NYSE:SYF) to $85 from $91, while keeping a Sector Perform rating on the consumer finance company. The reduced target still implies upside from the stocks recent trading level of $73, and InvestingPro data indicate a modest price-to-earnings ratio of 7.86.
RBC described Synchronys fourth-quarter results as encouraging, pointing to year-over-year gains in spending volumes and improvements in credit metrics. The company has delivered a 23% return on common equity over the last twelve months, a metric RBC highlighted when weighing the outlook.
In remarks accompanying the note, RBC analyst Jon Arfstrom said the 2026 outlook looks "mostly consistent with recent commentary" and with the firms expectations. Management projects mid-single digit percentage receivables growth driven by new programs, which RBC noted aligns with its forecast. InvestingPro data also underscore managements active capital allocation; share repurchases have been sizeable, a point reflected in the platforms ProTips for the stock.
On asset-quality guidance, Synchronys leadership anticipates net charge-offs in a 5.5% to 6.0% range and expects the Retail Service Agreement (RSA) to shift toward levels more in line with longer-term averages. The company has also sustained dividend payments for a decade, with the current yield at 1.64%.
Despite lowering the target price, RBC kept its financial estimates for Synchrony unchanged, signaling that the firms fundamental view of the company remains steady. That steadiness is reflected in analyst consensus, which sits around a $90 average price target.
Synchronys fourth-quarter 2025 reported results were mixed. The company posted earnings per share of $2.04, in line with analyst expectations, but revenue came in at $3.79 billion versus anticipated revenue of $3.84 billion, representing a shortfall that attracted investor attention.
Other broker-dealer activity has tracked similar recalibrations. Evercore ISI reduced its price target to $88 from $97 while maintaining an Outperform rating; the firm trimmed its 2026 and 2027 EPS estimates citing anticipated higher expenses and retailer share arrangements. BTIG cut its target to $96 from $100, noting expense guidance that it characterized as "inline to slightly worse" than expected.
Taken together, the note from RBC and recent peer revisions illustrate a shifting analyst landscape as firms reconcile encouraging credit trends and buyback activity with near-term revenue dynamics and expense assumptions.
What this means for investors
- RBCs price-target reduction narrows the margin between current market price and analyst valuation, but preserves a neutral Sector Perform stance.
- Managements guidance on receivables growth and its NCO range provide a framework for monitoring credit trends into 2026.
- Revenue execution remains a watch item after the Q4 revenue miss, even as EPS met expectations and return on equity remains elevated.
Investors and market participants will likely watch forthcoming results and disclosures for clarity on expense trajectories, retailer arrangements and the RSAs path toward longer-term norms.