Evercore ISI has lowered its price target on Synchrony Financial (NYSE: SYF) to $88.00, down from $97.00, while retaining an Outperform rating. The analyst team trimmed earnings forecasts for 2026 and 2027 to reflect what it describes as a higher expense trajectory and increased retailer share arrangements tied to Synchrony’s growth investments.
Specifically, Evercore reduced its 2026 EPS estimate to $9.11 from $9.34 and its 2027 EPS estimate to $10.53 from $10.69. For context, Synchrony reported diluted earnings per share of $9.86 over the last twelve months. The firm also flagged that the company is trading at a trailing price-to-earnings ratio of 7.86 and that fair-value metrics suggest the shares are slightly overvalued relative to those measures, even as the multiple remains low versus near-term earnings growth expectations.
Evercore’s downward revisions are primarily driven by anticipated near-term cost pressure as Synchrony steps up investments in areas tied to future growth. The firm called out the scaling of the Walmart partnership, an increase in AI-related spending, and heightened competitive dynamics as contributors to short-term negative earnings implications. Those investments and partnership economics - including higher retailer share arrangements - are expected to weigh on margins before any moderating benefits materialize.
Despite the nearer-term headwinds, Evercore remains constructive on Synchrony’s medium-term balance-sheet trajectory. The report notes expectations for balance-sheet growth potential as the Walmart partnership matures and payment rates normalize over time. On the credit side, the firm highlighted encouraging trends, substantial loss reserves and ample capital, positioning the company to continue share repurchase activity while supporting tangible book value growth.
Data cited alongside the analyst commentary indicate management has been actively repurchasing shares. Synchrony also currently offers a 1.64% dividend yield and has delivered 20% dividend growth over the past twelve months. Evercore projects approximately double-digit compound annual growth in tangible book value through 2027, supported by capital generation and buybacks.
Market reaction to recent headlines has been notable. Synchrony’s shares have fallen 16% since January 9, a sell-off that followed reports about a potential White House-mandated 10% cap on credit card rates. Evercore’s analysis shows that the stock has underperformed card industry peers by about 7% during that period. Nevertheless, analyst consensus maintains upside views with a reported high target of $103, and overall financial health metrics cited in the coverage rate the company in the upper tier, with a score of 3.02 out of 5 categorized as "GREAT."
On the quarterly front, Synchrony reported fourth-quarter 2025 earnings in line with consensus, posting EPS of $2.04. Revenue, however, missed expectations by roughly 1.3%, with $3.79 billion reported versus the $3.84 billion forecast. These results helped shape the tone of analyst updates that followed the release and the company’s 2026 guidance.
Among other broker responses, BTIG trimmed its price target on Synchrony to $96.00 from $100.00 but kept a Buy rating. BTIG’s analyst, Vincent Caintic, described the company’s 2026 guidance as "inline to slightly worse" than expectations. BTIG characterized the roughly 6% pullback in share price after the guidance as an exaggerated reaction, signaling a view that the market may be over-discounting near-term softness relative to longer-term fundamentals.
Taken together, the analyst revisions and post-earnings commentary present a portrait of a card issuer investing ahead of growth while accepting some near-term earnings dilution. Evercore’s move to pare its price target captures that tradeoff: modestly reduced near-term upside alongside a continued bullish stance on the company’s capital return capacity, credit profile and potential for tangible book value expansion as strategic initiatives scale.
What this means:
- Evercore’s action signals increased caution on short-term profitability as Synchrony pursues growth investments and retailer economics tied to partnerships.
- Balance-sheet strength, reserve positioning and capital return programs remain central to bullish analyst views despite EPS downgrades.
- Market volatility around regulatory headlines and guidance has amplified share price moves relative to peers.