Synchrony Financial upgraded to Strong Buy on stable credit, strong returns, and undervaluation

Synchrony Financial received a Strong Buy upgrade due to stable credit trends, strong capital returns, and undervaluation. The company reported Q2 earnings of $2.59 per share, beating estimates, with an 8% rise in purchase volumes and 2% growth in loan receivables despite high payment rates. Its CET1 capital ratio improved to 13.2%, enabling aggressive share buybacks and a capital return yield above 13% through dividends and repurchases. Shares trade at a low multiple of 8 times earnings with a target price of $95, supported by resilient earnings and strong capital deployment strategies.