Why Synchrony (SYF) is a Top Momentum Stock for the Long-Term

Zacks Investment Research highlights Synchrony Financial (SYF) as a notable momentum stock, assigning it an 'A' Momentum Style Score and 'A' VGM Score despite a #3 (Hold) Zacks Rank. This assessment is supported by nine analyst upgrades to its fiscal 2025 earnings estimate, which has increased to $8.19 per share, and an average earnings surprise of +17.9%. The analysis demonstrates how Zacks' complementary Style Scores can identify stocks with strong underlying characteristics, such as SYF's positive earnings revisions and recent 1% share price gain, even if they do not hold the highest Zacks Rank.

Analysis

Synchrony Financial (SYF) presents a compelling profile for momentum-focused investors, supported by strong underlying fundamental signals despite a neutral Zacks #3 (Hold) rank. The stock has been assigned a top-tier 'A' grade for both its Momentum and overall VGM (Value, Growth, Momentum) Style Scores. This positive assessment is primarily driven by significant upward revisions in analyst earnings estimates for fiscal 2025. Specifically, nine analysts have revised their estimates higher in the past 60 days, leading to a notable increase in the Zacks Consensus Estimate to $8.19 per share, up by $0.54. This bullish analyst sentiment is further reinforced by the company's track record of consistently beating expectations, evidenced by an average earnings surprise of +17.9%. While the stock's price appreciation has been modest at 1% over the past four weeks, the strong consensus on future earnings power suggests a positive underlying trend that warrants attention.

Key Decisions for Investors

• Momentum-focused investors should consider SYF for their shortlists, as its 'A' Momentum Score is underpinned by substantive upward earnings revisions rather than just speculative price movement.
• Investors should weigh the positive momentum signals, including nine analyst upgrades for fiscal 2025, against the cautionary Zacks #3 (Hold) rating, which could imply that other factors are tempering the immediate upside potential.
• Given the company's history of a +17.9% average earnings surprise, it is crucial to monitor upcoming earnings announcements to see if the trend of outperformance continues, which would be a key catalyst for the stock.
• Consider the stock's strong 'A' rating for VGM, which suggests a balanced profile across value, growth, and momentum, potentially appealing to investors who look for more than just a single investment style.