On Thursday, Stephens maintained its Equal Weight rating on Synovus Financial (NYSE:SNV), with a steady price target of $46.00. The firm's analysis followed Synovus Financial's reported earnings, which surpassed expectations.
The company's operating earnings per share (EPS) of $1.23 outdid the consensus estimate of $1.08 and Stephens' own projection of $1.05. The core pre-provision net revenue (PPNR) of $262 million exceeded the anticipated $251 million by the Street and was $0.06 higher than Stephens' forecast.
The report detailed that Synovus' net interest income (NII) exceeded consensus estimates by $0.02, with a net interest margin (NIM) that rose by 2 basis points to 3.22%, compared to the Street's prediction of 3.18%. Core fees edged past expectations by $0.01, and core expenses were $0.04 lower than anticipated. The financial institution's fourth quarter 2024 core revenue guidance of $560 million to $575 million suggests potential upside, as consensus estimates are at the lower end of this range. The guidance includes core fees of $120 million to $125 million, versus the Street's estimate of $121 million.
Synovus' outlook for NII is based on a NIM forecast that is expected to remain relatively stable compared to the third quarter, contrasting with a consensus outlook for the fourth quarter NIM of 3.16%. Additionally, the company's guidance for core expenses ranging from $305 million to $310 million presents a favorable comparison to the Street's expectation of $311 million. At the midpoint of these ranges, the outlook for fourth quarter core PPNR of $260 million is nearly 5% above the Street's forecast.
In other recent news, Synovus Financial Corp. reported a third-quarter core earnings per share (EPS) of $1.23, surpassing analysts' predictions of $1.08. This performance was attributed to reduced core expenses and a lower-than-expected loan loss provision expense. Both net interest income (NII) revenue and fee income contributed to the core revenue, which exceeded consensus expectations. Citi maintained a Buy rating on Synovus Financial with a price target of $53.00 after these results.
In the second quarter of 2024, Synovus reported a net loss of $0.16 per share, primarily due to a significant loss from securities repositioning. However, the company's adjusted earnings per share rose to $1.16, with net interest income increasing by 4% and adjusted non-interest revenue climbing 9% sequentially. Synovus also declared quarterly dividends for its common and preferred stocks.
Several firms, including Keefe, Bruyette & Woods, DA Davidson, Piper Sandler, Truist Securities, RBC Capital Markets, and Stephens, revised their financial outlook for Synovus based on these recent developments. These revisions were mainly influenced by factors such as improved revenue, asset quality, and strategic gains from the company's recent securities repositioning.
InvestingPro Insights
Synovus Financial's recent performance and outlook are further illuminated by real-time data from InvestingPro. The company's market capitalization stands at $6.96 billion, reflecting its substantial presence in the financial sector. Synovus has demonstrated impressive stock performance, with a remarkable 80.67% total return over the past year and a significant 34.59% return in the last six months. This aligns with the positive earnings report and guidance discussed in the article.
InvestingPro Tips highlight that Synovus is trading near its 52-week high, with its current price at 99.08% of that peak. This corroborates Stephens' expectation of the stock's potential outperformance. Additionally, Synovus has maintained dividend payments for 51 consecutive years, showcasing its commitment to shareholder returns. This consistency in dividends, coupled with a current yield of 3.14%, may appeal to income-focused investors.
However, it's worth noting that 5 analysts have revised their earnings downwards for the upcoming period, which investors should consider alongside the positive guidance provided by the company. For a more comprehensive analysis, InvestingPro offers 8 additional tips for Synovus Financial, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.