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Synchrony Q1 Earnings Match Estimates on Purchase Volume Growth
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Key Takeaways
SYF reported Q1 EPS of $2.27, up 20.1% YoY, matching estimates on strong purchase volume growth.
Synchrony benefited from a higher net interest margin and lower credit loss provisions.
SYF saw deposits dip and active accounts fall, while expenses rose and efficiency deteriorated.
Synchrony Financial (SYF - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.27, in line with the Zacks Consensus Estimate. The bottom line increased 20.1% year over year.
Net interest income reached $4.64 billion, up 3.8% from the prior-year period but missed the consensus estimate by 0.5%.
The quarterly earnings were supported by a higher net interest margin and strong purchase volume growth. A lower provision for credit losses also contributed to the performance. These positives were partly offset by lower deposits, a decline in average active accounts and higher expenses.
Synchrony Financial Price, Consensus and EPS Surprise
Retailer share arrangements of Synchrony advanced 19.6% year over year to $1.1 billion in the first quarter. Total loan receivables of $100.1 billion, up 0.5% year over year, beat the Zacks Consensus Estimate of $99.3 billion as well as our estimate of $98.9 billion.
Total deposits dipped 0.6% year over year to $82.9 billion and fell short of our estimate of $83.2 billion. The provision for credit losses was $1.3 billion, which declined 10.5% year over year on the back of lower net charge-offs and reserve release. The metric came in slightly lower than our estimate of $1.4 billion.
Synchrony’s purchase volume rose 5.6% year over year to $43 billion on higher spend per account and strong customer response. The figure beat the consensus estimate of $42 billion and our estimate of $41.4 billion.
Interest and fees on loans totaled $5.4 billion, rising 1.9% year over year and in line with our estimate. The increase was driven by higher loan receivables yield, primarily reflecting the impact of PPPCs, and was partially offset by reduced benchmark rates. Net interest margin improved 76 basis points year over year to 15.5% in the first quarter but came in slightly below the Zacks Consensus Estimate of 15.6%.
Average active accounts of 68.8 million slipped 0.7% year over year and missed the consensus mark and our estimate of 69.4 million.
Total other expenses of SYF increased 5.9% year over year to $1.3 billion, lower than our estimate of $1.4 billion. The efficiency ratio of 35.6% deteriorated 220 bps year over year and came above the consensus mark of 35%.
Movement in Individual Sales Platforms
Home & Auto period-end loan receivables decreased 3.7% year over year in the first quarter. Purchase volume remained flat, with higher spend per account and growth in furniture and electronics offset by selective home improvement spending and fewer active accounts. Interest and fees on loans declined 1.6% year over year.
Digital period-end loan receivables inched up 3.5% year over year in the reported quarter. Purchase volume rose 8.2%, driven by higher spend per account and strong customer response to enhanced offerings. Interest and fees on loans increased 5.7% year over year.
Diversified & Value period-end loan receivables rose 4.3% year over year in the quarter under review. Purchase volume rose 8.7%, driven by partner expansion and higher spend per account. Interest and fees on loans increased 1.4% year over year.
Health & Wellness period-end loan receivables inched up 0.8% year over year in the first quarter. Purchase volume rose 2.6%, driven by growth in pet and audiology, partly offset by weaker cosmetic and dental spending and fewer active accounts. Interest and fees on loans advanced 3.7% year over year.
Lifestyle period-end loan receivables decreased 1.3% year over year in the first quarter. Purchase volume rose 6.6%, driven by other apparel, goods and luxury, partly offset by fewer active accounts. Interest and fees on loans decreased 1.1% year over year.
Financial Position (as of March 31, 2026)
Synchrony exited the first quarter with cash and equivalents of $20.6 billion, which increased from the 2025-end level of $15 billion. Total assets of $121.5 billion increased from $119.1 billion at the 2025-end level. SYF’s balance sheet was consistently strong in the reported quarter, with total liquidity of $22.8 billion accounting for 18.8% of its total assets.
Total borrowings were $16.4 billion, up from $15.2 billion as of Dec. 31, 2025. Total equity of $16.5 billion decreased from the 2025-end figure of $16.8 billion.
Return on assets increased 20 bps year over year to 2.7% in the first quarter. Return on equity was 19.5%, which increased 110 bps year over year.
Capital Deployment Update
Synchrony returned $1 billion to shareholders, including $900 million through share buybacks and $104 million in dividends. The board approved a planned 13% increase in the quarterly dividend to 34 cents per share, effective from the third quarter of 2026.
The board approved a new share repurchase program of up to $6.5 billion, starting in the second quarter of 2026, with no expiration date. This replaces the previous program, which was set to expire on June 30, 2026.
SYF’s 2026 Guidance
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. SYF expects receivables growth to accelerate in the second half of 2026.
Earnings per share for 2026 are projected to be in the range of $9.10 to $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.
Bread Financial is set to report its first-quarter 2026 results on April 23, before the market opens. The Zacks Consensus Estimate for 2026 earnings is pegged at $9.88 per share, which has witnessed three upward revisions and no downward revisions over the past 30 days. The consensus estimate for 2026 revenues is pinned at $3.97 billion, indicating an approximate 3.3% increase from the year-ago reported figure. BFH has surpassed earnings estimates in each of the last four reported quarters, delivering an average surprise of 153.5%.
Atlantic Real Estate is set to report first-quarter 2026 results on May 7, before the market opens. The Zacks Consensus Estimate for 2026 earnings is pegged at $1.91 per share, indicating a 1.6% year-over-year increase. The consensus estimate for 2026 revenues is pinned at $53.8 million, followed by a 1.9% year-over-year increase in 2027. REFI surpassed earnings estimates in each of the last four reported quarters, delivering an average surprise of 6.1%.
Virtu Financial is set to report first-quarter 2026 results on April 29, before the market opens. The Zacks Consensus Estimate for 2026 earnings is pegged at $5.62 per share, reflecting four upward revisions and no downward revisions over the past 30 days. The consensus estimate for 2026 revenues is pinned at $2.05 billion. VIRT surpassed earnings estimates in each of the last four reported quarters, delivering an average surprise of 18.6%.
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Synchrony Q1 Earnings Match Estimates on Purchase Volume Growth
Key Takeaways
Synchrony Financial (SYF - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.27, in line with the Zacks Consensus Estimate. The bottom line increased 20.1% year over year.
Net interest income reached $4.64 billion, up 3.8% from the prior-year period but missed the consensus estimate by 0.5%.
The quarterly earnings were supported by a higher net interest margin and strong purchase volume growth. A lower provision for credit losses also contributed to the performance. These positives were partly offset by lower deposits, a decline in average active accounts and higher expenses.
Synchrony Financial Price, Consensus and EPS Surprise
Synchrony Financial price-consensus-eps-surprise-chart | Synchrony Financial Quote
SYF’s Q1 Results in Detail
Retailer share arrangements of Synchrony advanced 19.6% year over year to $1.1 billion in the first quarter. Total loan receivables of $100.1 billion, up 0.5% year over year, beat the Zacks Consensus Estimate of $99.3 billion as well as our estimate of $98.9 billion.
Total deposits dipped 0.6% year over year to $82.9 billion and fell short of our estimate of $83.2 billion. The provision for credit losses was $1.3 billion, which declined 10.5% year over year on the back of lower net charge-offs and reserve release. The metric came in slightly lower than our estimate of $1.4 billion.
Synchrony’s purchase volume rose 5.6% year over year to $43 billion on higher spend per account and strong customer response. The figure beat the consensus estimate of $42 billion and our estimate of $41.4 billion.
Interest and fees on loans totaled $5.4 billion, rising 1.9% year over year and in line with our estimate. The increase was driven by higher loan receivables yield, primarily reflecting the impact of PPPCs, and was partially offset by reduced benchmark rates. Net interest margin improved 76 basis points year over year to 15.5% in the first quarter but came in slightly below the Zacks Consensus Estimate of 15.6%.
Average active accounts of 68.8 million slipped 0.7% year over year and missed the consensus mark and our estimate of 69.4 million.
Total other expenses of SYF increased 5.9% year over year to $1.3 billion, lower than our estimate of $1.4 billion. The efficiency ratio of 35.6% deteriorated 220 bps year over year and came above the consensus mark of 35%.
Movement in Individual Sales Platforms
Home & Auto period-end loan receivables decreased 3.7% year over year in the first quarter. Purchase volume remained flat, with higher spend per account and growth in furniture and electronics offset by selective home improvement spending and fewer active accounts. Interest and fees on loans declined 1.6% year over year.
Digital period-end loan receivables inched up 3.5% year over year in the reported quarter. Purchase volume rose 8.2%, driven by higher spend per account and strong customer response to enhanced offerings. Interest and fees on loans increased 5.7% year over year.
Diversified & Value period-end loan receivables rose 4.3% year over year in the quarter under review. Purchase volume rose 8.7%, driven by partner expansion and higher spend per account. Interest and fees on loans increased 1.4% year over year.
Health & Wellness period-end loan receivables inched up 0.8% year over year in the first quarter. Purchase volume rose 2.6%, driven by growth in pet and audiology, partly offset by weaker cosmetic and dental spending and fewer active accounts. Interest and fees on loans advanced 3.7% year over year.
Lifestyle period-end loan receivables decreased 1.3% year over year in the first quarter. Purchase volume rose 6.6%, driven by other apparel, goods and luxury, partly offset by fewer active accounts. Interest and fees on loans decreased 1.1% year over year.
Financial Position (as of March 31, 2026)
Synchrony exited the first quarter with cash and equivalents of $20.6 billion, which increased from the 2025-end level of $15 billion. Total assets of $121.5 billion increased from $119.1 billion at the 2025-end level. SYF’s balance sheet was consistently strong in the reported quarter, with total liquidity of $22.8 billion accounting for 18.8% of its total assets.
Total borrowings were $16.4 billion, up from $15.2 billion as of Dec. 31, 2025. Total equity of $16.5 billion decreased from the 2025-end figure of $16.8 billion.
Return on assets increased 20 bps year over year to 2.7% in the first quarter. Return on equity was 19.5%, which increased 110 bps year over year.
Capital Deployment Update
Synchrony returned $1 billion to shareholders, including $900 million through share buybacks and $104 million in dividends. The board approved a planned 13% increase in the quarterly dividend to 34 cents per share, effective from the third quarter of 2026.
The board approved a new share repurchase program of up to $6.5 billion, starting in the second quarter of 2026, with no expiration date. This replaces the previous program, which was set to expire on June 30, 2026.
SYF’s 2026 Guidance
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. SYF expects receivables growth to accelerate in the second half of 2026.
Earnings per share for 2026 are projected to be in the range of $9.10 to $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’s Zacks Rank & Key Picks
SYF currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Finance space are Bread Financial Holdings, Inc. (BFH - Free Report) , Atlantic Real Estate Finance, Inc. (REFI - Free Report) and Virtu Financial, Inc. (VIRT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bread Financial is set to report its first-quarter 2026 results on April 23, before the market opens. The Zacks Consensus Estimate for 2026 earnings is pegged at $9.88 per share, which has witnessed three upward revisions and no downward revisions over the past 30 days. The consensus estimate for 2026 revenues is pinned at $3.97 billion, indicating an approximate 3.3% increase from the year-ago reported figure. BFH has surpassed earnings estimates in each of the last four reported quarters, delivering an average surprise of 153.5%.
Atlantic Real Estate is set to report first-quarter 2026 results on May 7, before the market opens. The Zacks Consensus Estimate for 2026 earnings is pegged at $1.91 per share, indicating a 1.6% year-over-year increase. The consensus estimate for 2026 revenues is pinned at $53.8 million, followed by a 1.9% year-over-year increase in 2027. REFI surpassed earnings estimates in each of the last four reported quarters, delivering an average surprise of 6.1%.
Virtu Financial is set to report first-quarter 2026 results on April 29, before the market opens. The Zacks Consensus Estimate for 2026 earnings is pegged at $5.62 per share, reflecting four upward revisions and no downward revisions over the past 30 days. The consensus estimate for 2026 revenues is pinned at $2.05 billion. VIRT surpassed earnings estimates in each of the last four reported quarters, delivering an average surprise of 18.6%.