Synchrony Financial (NYSE:SYF) sees a significant drop in short-term interest

Synchrony Financial (NYSE: SYF – Get a rating) was the target of a sharp decline in short interest in May. As of May 15, there was short interest totaling 12,440,000 shares, down 17.8% from the April 30 total of 15,130,000 shares. About 2.5% of the stock’s shares are sold short. Based on an average daily volume of 7,300,000 shares, the day-to-cover ratio is currently 1.7 days.

A number of research analysts have recently commented on SYF’s actions. Morgan Stanley downgraded Synchrony Financial from an “overweight” rating to an “equally weighted” rating and lowered its target price for the company from $56.00 to $40.00 in a Monday, March 28 research report. StockNews.com began covering Synchrony Financial in a research report on Thursday, March 31. They set a “hold” rating for the company. Credit Suisse Group lowered its price target on Synchrony Financial from $60.00 to $58.00 and set an “outperform” rating for the company in a Monday, January 31 research report. Bank of America lowered its price target on Synchrony Financial from $52.00 to $45.00 in a Thursday, March 17 research report. Finally, BMO Capital Markets raised its price target on Synchrony Financial from $49.00 to $52.00 and gave the stock an “outperform” rating in a Tuesday, April 19 research report. One investment analyst has assigned the stock a sell rating, six have assigned a hold rating and thirteen have assigned the stock a buy rating. Based on data from MarketBeat.com, the stock has a consensus rating of “Buy” and a consensus price target of $51.26.

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Shares of Synchrony Financial were up $0.33 during Tuesday’s trading, hitting $36.47. 163,661 shares of the stock have been traded, compared to its average volume of 7,065,777. The company has a market capitalization of $18.29 billion, a P/E ratio of 4.90, a price/ earnings growth of 0.28 and a beta of 1.43. The company has a current ratio of 1.24, a quick ratio of 1.18 and a debt ratio of 1.05. Synchrony Financial has a 52-week low of $31.36 and a 52-week high of $52.49. The stock’s fifty-day simple moving average is $36.41 and its 200-day simple moving average is $41.56.

Synchrony Financial (NYSE: SYF – Get a rating) last announced its quarterly results on Monday, April 18. The financial services provider reported EPS of $1.77 for the quarter, beating the consensus estimate of $1.54 by $0.23. Synchrony Financial had a return on equity of 29.99% and a net margin of 26.26%. In the same quarter last year, the company achieved EPS of $1.73. As a group, stock analysts expect Synchrony Financial to post EPS of 5.65 for the current year.

The company also recently announced a quarterly dividend, which was paid on Thursday, May 12. Investors of record on Monday, May 2 received a dividend of $0.22 per share. This represents a dividend of $0.88 on an annualized basis and a dividend yield of 2.41%. The ex-dividend date was Friday, April 29. Synchrony Financial’s dividend payout ratio (DPR) is 11.94%.

Synchrony Financial said its board authorized a stock repurchase plan on Monday, April 18 that allows the company to repurchase $2.80 billion in stock. This repurchase authorization authorizes the financial services provider to repurchase up to 13.6% of its shares through purchases on the open market. Stock buyback plans are usually an indication that a company’s management believes its stock is undervalued.

Hedge funds have recently changed their positions in the stock. Rockefeller Capital Management LP increased its position in Synchrony Financial shares by 196.8% during the third quarter. Rockefeller Capital Management LP now owns 25,258 shares of the financial services provider worth $1,233,000 after buying an additional 16,747 shares last quarter. Greenleaf Trust increased its stake in Synchrony Financial by 3.3% during the third quarter. Greenleaf Trust now owns 6,842 shares of the financial services provider worth $334,000 after buying 219 more shares in the last quarter. FineMark National Bank & Trust acquired a new position in Synchrony Financial during the third quarter worth $200,000. Jump Financial LLC acquired a new stock position in Synchrony Financial in Q3 worth $2,329,000. Finally, Soros Fund Management LLC increased its stake in Synchrony Financial shares by 19.7% in the third quarter. Soros Fund Management LLC now owns 896,810 shares of the financial services provider valued at $43,836,000 after purchasing an additional 147,645 shares in the last quarter. Institutional investors hold 98.26% of the company’s shares.

Synchrony Financial Company Profile (Get a rating)

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products and consumer installment loans. The company also offers private label credit cards, dual cards, co-branded and general purpose credit cards, short and long term installment loans and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts for retail and commercial customers, as well as deposits through brokerage firms in third-party securities.

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