On Wednesday, Piper Sandler showed confidence in Synovus Financial (NYSE: NYSE:SNV) shares by raising its price target from $56.00 to $64.00, while keeping an Overweight rating on the stock. The upgrade comes as the company's shares, currently trading at $55.14, have shown remarkable momentum with a 54.65% gain over the past six months.
According to InvestingPro data, analyst price targets for SNV range from $51 to $67. The financial firm's analyst cited several positive factors in the updated guidance that influenced the decision.
As stated by the analyst, Synovus provided an updated presentation that outlined key financial forecasts, including an upward revision in revenue for the fourth quarter of 2024 and growth in core deposits. The $7.81 billion market cap company has maintained dividend payments for 51 consecutive years, demonstrating strong financial stability.
However, the expectations for loan growth in the same period were moderated. Moreover, the company is expected to maintain stable credit quality metrics and engage in proactive capital management, which includes an anticipated $50 million in share repurchases.
Looking ahead to 2025, the analyst noted that Synovus' guidance suggests improved loan growth trends, which are supported by the company's Relationship Manager (RM) expansion plan. Further details of this strategy were shared in the presentation.
The analyst's revised model aligns with these projections, and there is potential for increased net interest income (NII) if the net interest margin (NIM) benefits from the anticipated loan growth and a potentially stabilizing rate environment.
The new price target of $64 reflects a valuation of approximately 12.5 times Piper Sandler's estimated 2026 earnings for Synovus. Currently trading at 25.09 times earnings with a price-to-book ratio of 1.61, InvestingPro analysis suggests the stock is fairly valued. This increase in the price target is attributed to the expected multiple expansion driven by better economic and growth trends as indicated by the company's guidance.
The analyst's current forecast for Synovus' 2025 operating revenue remains conservative, positioned at the lower end of the guidance range, but there is an openness to revisiting this estimate as the situation evolves. For deeper insights into Synovus' valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Synovus Financial Corp has reported strong Q3 earnings, with GAAP earnings per share of $1.18 and a 6% sequential rise in adjusted diluted EPS to $1.23, attributed to stronger net interest income and lower credit loss provisions.
The company also completed approximately $100 million in share repurchases during the quarter. DA Davidson has increased its price target for Synovus from $60 to $65, maintaining a Buy rating, while Deutsche Bank (ETR:DBKGn) has upgraded Synovus stock to Buy, citing a favorable growth outlook.
In recent developments, Synovus has announced the promotion of Anne Fortner to Executive Vice President, Chief Credit Officer, succeeding Bob Derrick upon his retirement. The company has also declared dividends for both common and preferred stockholders, with a dividend of $0.38 per share on the company's common stock.
Furthermore, Synovus announced a $500 million offering of senior notes due in 2030, with the proceeds expected to be allocated to general corporate activities. For Q4, Synovus provided an adjusted revenue guidance of $560 million to $575 million, anticipating a stable net interest margin. The company's strategic focus is on organic growth rather than acquisitions in the current market environment.
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