Overview

• U.S. consumer finance firm's Q2 net income fell 8% yr/yr to $885 mln

• Q2 net interest income rose 2%, driven by lower funding costs and higher loan yields

• Company cites strong purchase volume growth and disciplined credit management

Outlook

• Synchrony did not provide specific guidance for the current or upcoming quarter or year in the press release

Result Drivers

• PURCHASE VOLUME GROWTH - Co said record purchase volume and higher spend per account drove results

• LOWER FUNDING COSTS - Net interest income rose, primarily driven by lower interest-bearing liabilities cost and improved loan yields

• DISCIPLINED CREDIT MANAGEMENT - Co said lower delinquency and net charge-offs below target range supported results

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 EPS		$2.59
Q2 Net Income		$885 mln
Q2 Net Interest Income		$4.60 bln
Q2 Credit Loss Provision		-$1.20 bln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy"

• Wall Street's median 12-month price target for Synchrony Financial is $90.00, about 22.6% above its July 20 closing price of $73.41

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago

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