On Thursday, Stephens, a financial services firm, increased its price target for Synovus (NYSE:SNV) Financial Corp (NYSE:SNV) to $52.00, up from the previous $46.00. The firm has maintained an Equal Weight rating on the stock.
The adjustment follows Synovus' reported earnings, which surpassed expectations. The company's pre-provision net revenue (PPNR) outperformed consensus estimates by $0.06, and its fourth-quarter 2024 guidance is projected to be nearly 5% above the consensus at $260 million. Stephens has set its own estimate slightly lower at $258 million.
Synovus' net interest margin (NIM) for the third quarter was better than anticipated and is expected to remain stable during the upcoming Federal Reserve easing cycle. It is then forecasted to increase as the repricing of fixed assets becomes a more significant factor and deposit betas reach a targeted 45%.
The firm anticipates Synovus' loan growth to return to normal levels by 2025, with additional momentum in fees contributing to an expected revenue growth of 4% year-over-year for that year. Despite these positive developments, Stephens projects the core efficiency ratio to remain unchanged at 54.8% for fiscal year 2025, with a slight improvement to 53.6% for fiscal year 2026.
In light of these factors, Stephens has revised its operating earnings per share (EPS) estimates upward for Synovus for the years 2024 through 2026 by 6.0%, 4.5%, and 2.0%, respectively. This led to the increase in the price target to $52 from $46, reaffirming an Equal Weight rating on the shares.
In other recent news, Synovus Financial has been the subject of several analyst reports. Following the company's release of its quarterly earnings, Piper Sandler reaffirmed an Overweight rating, emphasizing the company's better-than-expected core EPS and net interest margin growth. Truist Securities also reiterated a Buy rating, highlighting strong third-quarter results, with Synovus' core EPS surpassing both analyst and street estimates.
Stephens maintained its Equal Weight rating, noting that the company's operating earnings per share exceeded expectations. Citi also maintained a Buy rating, following the company's third-quarter earnings that surpassed consensus expectations.
Synovus reported a net loss in the second quarter of 2024 due to a significant loss from securities repositioning. However, the company's adjusted earnings per share rose, with net interest income increasing and adjusted non-interest revenue climbing sequentially.
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. These are all recent developments that investors should consider.
InvestingPro Insights
Recent data from InvestingPro adds context to Stephens' optimistic outlook on Synovus Financial Corp (NYSE:SNV). The company's market capitalization stands at $7.31 billion, with a P/E ratio of 30.96, indicating that investors are willing to pay a premium for SNV's earnings. This aligns with the InvestingPro Tip that SNV is "Trading at a high earnings multiple."
Synovus has demonstrated strong performance recently, with a significant 9.98% return over the last week and an impressive 80.67% return over the past year. This robust performance is reflected in the InvestingPro Tip noting a "Significant return over the last week" and "High return over the last year." Additionally, the stock is trading near its 52-week high, with its current price at 98.43% of the 52-week high.
For income-focused investors, Synovus offers a dividend yield of 3.14%, and an InvestingPro Tip highlights that the company "Has maintained dividend payments for 51 consecutive years," showcasing its commitment to shareholder returns.
These insights complement Stephens' analysis and provide additional context for investors considering SNV stock. InvestingPro offers 10 additional tips for Synovus Financial Corp, providing a more comprehensive view for those seeking deeper analysis.
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