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Synchrony Q3 Earnings Beat Estimates on Improved Purchase Volume
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Key Takeaways
SYF reported Q3 adjusted EPS of $2.68, beating estimates by 8.1% but falling 6.3% year over year.
Purchase volume rose 8% to $49.7 billion, while net interest income grew 1.9% to $4.8 billion.
SYF raised its 2026 EPS outlook to around $9.50 per share despite higher costs and credit-loss provisions.
Synchrony Financial (SYF - Free Report) 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 and EPS Surprise
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%.
Movement in Individual Sales Platforms
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’s Financial Position (As of Sept. 30, 2026)
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.
Capital Deployment Update
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.
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.
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.
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.
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Synchrony Q3 Earnings Beat Estimates on Improved Purchase Volume
Key Takeaways
Synchrony Financial (SYF - Free Report) 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 and EPS Surprise
Synchrony Financial price-consensus-eps-surprise-chart | Synchrony Financial Quote
Synchrony’s Q3 Results in Detail
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%.
Movement in Individual Sales Platforms
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’s Financial Position (As of Sept. 30, 2026)
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.
Capital Deployment Update
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.
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.
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’s Zacks Rank & Key Picks
SYF currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Finance space are American Integrity Insurance Group, Inc. (AII - Free Report) , Mercury General Corporation (MCY - Free Report) and Robinhood Markets, Inc. (HOOD - 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.
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.