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Can Synchrony Beat Q2 Earnings Estimates on Improving Margins?
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Key Takeaways
Synchrony is projected to report Q2 EPS of $1.72, up 11% year over year on $4.5 billion in revenues.
Higher net interest margin and lower charge-offs are expected to boost SYF's Q2 profitability.
AMT, ITUB and SOFI also show potential for earnings beats in the to-be-reported quarter.
Consumer financial services company, Synchrony Financial (SYF - Free Report) , is set to report second-quarter 2025 results on July 22, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.72 per share on revenues of $4.5 billion.
The second-quarter earnings estimate has moved north by 3 cents over the past week. The bottom-line projection indicates a year-over-year increase of 11%. The Zacks Consensus Estimate for quarterly revenues implies year-over-year growth of 2.2%.
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For the full-year 2025, the Zacks Consensus Estimate for Synchrony’s revenues is pegged at $18.47 billion, implying a rise of 2.5% year over year. Also, the consensus mark for current year EPS is pegged at $7.76, implying a jump of around 17.8% on a year-over-year basis. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
SYF’s earnings beat the consensus estimate in each of the last four quarters, with the average surprise being 10.2%.
Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.
Synchronyhas an Earnings ESP of +5.16% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
What’s Shaping SYF’s Q2 Results?
Synchrony is expected to have seen advantages in the second quarter from increased net interest margin and Interest-Earning Assets. The net charge-offs are also likely to have substantially decreased in the quarter under review. Our model predicts interest and fees on loans of $5.3 billion for the quarter, relatively flat year over year.
The financial service provider is expected to have witnessed an increase in Average Interest-Earning Assets. The consensus estimate indicates a 2.5% increase in the metric from the year-ago period. The Zacks Consensus Estimate for net interest margin is pegged at 14.53%, up from 14.46% achieved a year ago, increasing its profitability.
The consensus mark for the net charge-offs ratio is pegged at 5.99, down from 6.42 a year ago. The above-mentioned factors are likely to have benefited the company in the second quarter, positioning it for not only year-over-year growth but also an earnings beat. However, Synchrony is expected to have incurred increased information processing and employee costs in the second quarter and witnessed lower purchase volumes, partially offsetting the positives.
Both the Zacks Consensus Estimate and our model estimate indicate that the total average active accounts are likely to decline 0.7% in the second quarter.
The Zacks Consensus Estimate for Synchrony’s total purchase volumes for the quarter under review indicates a decline of 3.6% year over year, whereas our model estimate predicts a 3% fall, due to selective consumer spending and credit actions. The Zacks Consensus Estimate for the efficiency ratio is pegged at 32.54%, indicating a deterioration from the prior-year reported figure of 31.70%.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader Finance space, as our model shows that these, too, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for American Tower’s bottom line for the to-be-reported quarter is pegged at $2.59, which remained stable over the past week. The consensus estimate for American Tower’s revenues is pegged at $2.58 billion.
Itaú Unibanco Holding S.A. (ITUB - Free Report) has an Earnings ESP of +5.56% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Itaú Unibanco’s bottom line for the to-be-reported quarter is pegged at 18 cents, which remained stable over the past week. The consensus estimate for Itaú Unibanco’s revenues is pegged at $7.75 billion.
SoFi Technologies, Inc. (SOFI - Free Report) has an Earnings ESP of +6.94% and a Zacks Rank of 2.
The Zacks Consensus Estimate for SOFI’s bottom line for the to-be-reported quarter is pegged at 6 cents, a significant jump from a penny a year ago. The consensus estimate for SOFI’s revenues is pegged at $805.91 million, a 35% year-over-year jump.
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Can Synchrony Beat Q2 Earnings Estimates on Improving Margins?
Key Takeaways
Consumer financial services company, Synchrony Financial (SYF - Free Report) , is set to report second-quarter 2025 results on July 22, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.72 per share on revenues of $4.5 billion.
The second-quarter earnings estimate has moved north by 3 cents over the past week. The bottom-line projection indicates a year-over-year increase of 11%. The Zacks Consensus Estimate for quarterly revenues implies year-over-year growth of 2.2%.
For the full-year 2025, the Zacks Consensus Estimate for Synchrony’s revenues is pegged at $18.47 billion, implying a rise of 2.5% year over year. Also, the consensus mark for current year EPS is pegged at $7.76, implying a jump of around 17.8% on a year-over-year basis. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
SYF’s earnings beat the consensus estimate in each of the last four quarters, with the average surprise being 10.2%.
Synchrony Financial Price and EPS Surprise
Synchrony Financial price-eps-surprise | Synchrony Financial Quote
Q2 Earnings Whispers for SYF
Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.
Synchronyhas an Earnings ESP of +5.16% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
What’s Shaping SYF’s Q2 Results?
Synchrony is expected to have seen advantages in the second quarter from increased net interest margin and Interest-Earning Assets. The net charge-offs are also likely to have substantially decreased in the quarter under review. Our model predicts interest and fees on loans of $5.3 billion for the quarter, relatively flat year over year.
The financial service provider is expected to have witnessed an increase in Average Interest-Earning Assets. The consensus estimate indicates a 2.5% increase in the metric from the year-ago period. The Zacks Consensus Estimate for net interest margin is pegged at 14.53%, up from 14.46% achieved a year ago, increasing its profitability.
The consensus mark for the net charge-offs ratio is pegged at 5.99, down from 6.42 a year ago. The above-mentioned factors are likely to have benefited the company in the second quarter, positioning it for not only year-over-year growth but also an earnings beat. However, Synchrony is expected to have incurred increased information processing and employee costs in the second quarter and witnessed lower purchase volumes, partially offsetting the positives.
Both the Zacks Consensus Estimate and our model estimate indicate that the total average active accounts are likely to decline 0.7% in the second quarter.
The Zacks Consensus Estimate for Synchrony’s total purchase volumes for the quarter under review indicates a decline of 3.6% year over year, whereas our model estimate predicts a 3% fall, due to selective consumer spending and credit actions. The Zacks Consensus Estimate for the efficiency ratio is pegged at 32.54%, indicating a deterioration from the prior-year reported figure of 31.70%.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader Finance space, as our model shows that these, too, have the right combination of elements to beat on earnings this time around:
American Tower Corporation (AMT - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Tower’s bottom line for the to-be-reported quarter is pegged at $2.59, which remained stable over the past week. The consensus estimate for American Tower’s revenues is pegged at $2.58 billion.
Itaú Unibanco Holding S.A. (ITUB - Free Report) has an Earnings ESP of +5.56% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Itaú Unibanco’s bottom line for the to-be-reported quarter is pegged at 18 cents, which remained stable over the past week. The consensus estimate for Itaú Unibanco’s revenues is pegged at $7.75 billion.
SoFi Technologies, Inc. (SOFI - Free Report) has an Earnings ESP of +6.94% and a Zacks Rank of 2.
The Zacks Consensus Estimate for SOFI’s bottom line for the to-be-reported quarter is pegged at 6 cents, a significant jump from a penny a year ago. The consensus estimate for SOFI’s revenues is pegged at $805.91 million, a 35% year-over-year jump.