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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Synchrony Financial (XNYS:SYF) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SYF
Name:
SYNCHRONY FINANCIAL (XNYS:SYF)
Sector:
1.40B
Industry:
Credit Services
CEO:
Ms. Margaret Keane
Total Employees:
18,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -131.85% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SYNCHRONY FINANCIAL(SYF) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
31.97
One Month Price Target:
$32.25
Six Month Price Target :
$33.64
Likely Price in One Year's Time:
Ticker:
$35.31
Likely Trading Range Today Under (Normal Volatility)
$31.8
Price Upper limit ($) :
$32.17
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$29.74
This week:
$26.98
This month :
$21.99
Other Primary facts
Market Cap:
14.93B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
481.76M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.91%
-26.03%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$42.32
$37.59
$21.62
$26.35
Medium risk (<10%) entry points
Buy Call
Sell Call
$36.05
Buy Put:
Sell Put:
$35.04
$27.88
$28.90
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SYF
Sharpe Ratio:
0.84%
Comparison:
SYF, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -54.85% lower than the industry
& is -63.18% lower than the market/S&P 500 average
Average Returns/Yield of
SYF
Daily returns:
0.04%
Weekly returns:
0.19%
Monthly returns:
0.75%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -52.77% below industry average
Classification:
SYF, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.17
Statistical test of Returns:
SYF has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.42%
Weekly Volatility:
7.64%
Monthly Volatility:
15.27%
Yearly Volatility:
52.91%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.18%
Volatility in last five trading days has been -65.43% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.98%
Weekly VaR:
-15.60%
Monthly VaR:
-31.20%
How Much Can the price of
SYF
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$23.28
This translates to price declining to:
$4.80
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
SYF is a 120.23% riskier investment compared to the market/S&P 500 & is 88.67% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 3.50% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SYF
Beta in relation to market/S&P 500--1.56
Expected beta in 1 year's time:
0.931
Expected beta in 3 year's time:
1.316
Unlevered (debt free) Beta:
0.279
Beta in relation to Nasdaq (XNAS):
1.085
Beta in relation to all global stocks::
1.129
Beta Comparison & Analysis
Beta of competitors/peers::
1.187
Beta is 31.05% higher than peers
Average Industry Beta:
1.332
Beta is 16.79% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
27.14%
Sustainable growth rate is -19.55% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.048
Alpha is -170.77% below industry average alpha yield
Alpha is -306% below the market average
Analysis of Cost of Capital of
SYF
Equity cost of capital:
0.138
Equity cost of capital is 12.48% above industry mean WACC
Unlevered (without debt) cost of capital:
2.48%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$32.54
Revenue growth rate per share of (3Y):
1.12
Annual revenue growth rate is -91.94% below industry average
EPS:
$7.37
Expected Annual growth rate of EPS (3Y):
9.50%
Expected future EPS growth rate is -62.08% lower than the Credit Services industry
Free cash flow (FCF) per share:
$11.96
Balance sheet equity growth per share: 27.92%
Equity growth rate per share is 17.26% higher than the industry
Debt per share
$0.00
EBITDA per share
$14.06
Valuation Analysis Today of
SYF
P/E Ratio:
4.67
P/E Ratio of Competitors/Peers:
8.74
P/E ratio is -46.56% lower than main peers & is -61.54% lower than the industry
Stock price/value with industry average P/E ratio: $89.45
SYF is -64.26% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $17.50
Present value of the expected future dividends only: $6.37
P/S (Price to Sales ratio):
0.98
Price to sales ratio is -81.10% below the industry mean
P/B (Price to book value ratio):
1.12
Price to free cash flow: 2.67
-
Net income growth rate (3Y):
90.67%
Net income growth rate is 461.34% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 0.24%
Dividend yeild: 2.75%
Previous Dividend: $0.22
Previous adjusted dividend: $0.22
Previous Dividend: $0.88
-
-
Average dividend payment (long-term): $0.22
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 08/10/2022
Expected next dividend record date: 08/01/2022
Expected next dividend declaration date: 20/07/2022
Previous dividend payment date: 05/12/2022
Previous dividend record date: 05/02/2022
Previous dividend declaration date: 21/04/2022
Dividend History:
2022-04-29--$0.22
2021-10-29--$0.22
2021-04-30--$0.22
2022-02-09--$0.22
2021-07-30--$0.22
2021-02-04--$0.22
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
601.19%
Net debt to equity ratio:
-76.77%
Debt to assets ratio:
85.74%
Net debt to assets ratio:
-11.03%
Debt-to-asset ratio is 9.98% above industry average
Ability to repay debt:
Interest coverage ratio:
7.04
Interest coverage ratio is -28.31% less than industry average
Looking forward:
Debt growth rate:
-8.04%
Annual debt growth is -116% lower than industry average debt growth rate
Debt repayment rate in last quarter: 100.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.712
Statistical significance of correlation:
SYF has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 27.01% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.035
Covariance of price movement with the market:
0.069
Kurtosis
8.835
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.513
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SYF
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
35.73%
Operating profit margin is 22.87% higher than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
23.85%
Effective tax rate is 10.15% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
29.99%
Return on equity (ROE) is -29.26% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.31%
Return on assets (ROA) is -28.88% lower than the industry
Financial Leverage:
7.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 11.5 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
870.8K
Each employee generates 20% more revenue than industry average revenue per employee
EBITDA generated per employee:
376.4K
Each employee generates -10% less EBITDA than industry average revenue per employee
Profit generated per employee:
228.8K
Each employee generates -6% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
77.6K
Each employee generates 32% more free cash flow than industry average revenue per employee
Assets/Capital per employee
125.2K
Each employee generates 32% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SYF
ORIX CORPORATION (XNYS:IX)
ROCKET COMPANIES, INC. (XNYS:RKT)
KEYCORP (XNYS:KEY)
Credit Suisse Group Ltd (XNYS:CS)
REGIONS FINANCIAL CORPORATION (XNYS:RF)
Deutsche Bank AG (XNYS:DB)
CITIZENS FINANCIAL GROUP, INC. (XNYS:CFG)
M&T BANK CORPORATION (XNYS:MTB)
RAYMOND JAMES FINANCIAL, INC. (XNYS:RJF)
Current Analyst Ratings
Strong buy�21%
Buy�42%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
15.68B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
1.35B
1.85B
507.00M
-
326.00M
15.55B
962.00M
402.00M
6.78B
-
4.12B
5.42B
1.29B
4.12B
Statement of Cash Flow
Date:
Period:
107.00M
Differed Income Tax :
49.00M
Stock Based Compensation :
-
Change in Working Capital :
- 360000.00K
Accounts Receivables:
-
Other Working Capital:
10.54B
Other Non-Cash Items:
678.00M
Net Cash Provided by Operating Activities:
1.40B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 1478000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
10.54B
-
10.54B
2.73M
-
-
10.54B
-
1.11B
1.15B
-
-
-
2.25B
87.27B
95.56B
-
-
24.40M
-
-
-
-
-
-
81.85B
81.85B
1.00M
15.00B
-
-
March 31, 2022 at 6:00:00 AM
-
13.73B
95.58B
-
-
- 10541000.0K
-
3.30B
1.82B
- 1150000.00K
-
- 968000.00K
- 10000.00K
1.15B
- 976000.00K
-
2.24B
10.92B
8.69B
1.40B
-
1.40B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SYF
2023
2024
2025
2026
2027
$35.49
$54.25
$59.92
$66.18
$73.10