Synchrony Financial Shares Have Recovered From The Banking Crisis But Are Still Cheap

Summary

• Synchrony Financial continues to grow loan balances by double digit percentages year over year despite a slowdown in consumer spending growth.
• Deposits remain a strength for Synchrony, holding constant at 84% of funding sources.
• Reduced charge-offs and loss reserve build are the main driver of the increase in my 2023 EPS estimate this quarter.
• Synchrony's common stock is still rated a buy, but preferred shares offer a higher dividend along with capital gain potential, making them a better choice for income investors.

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Synchrony Financial (NYSE:SYF) shares have recovered since I wrote about the company last quarter, outperforming the Financial sector (XLF) and the broader market (SPY). The common shares are now trading where

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SYF, SYF.PA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Also long Synchrony Finl 3.95% notes due 12/01/2027 (CUSIP: 87165BAM5), Synchrony CDs, and Synchrony High Yield Savings Account