On Thursday, Stephens reaffirmed its Equal Weight rating and $58.00 price target for Synovus (NYSE:SNV) Financial shares (NYSE:SNV), following the company's earnings report which surpassed both market consensus and Stephens' own expectations. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward, with the stock showing impressive momentum, delivering a 63.76% return over the past year.
The reported operating earnings per share (EPS) of $1.25 exceeded the consensus estimate of $1.15 and Stephens' forecast of $1.17. The beat was attributed to a combination of a higher net interest income (NII)-driven pre-provision net revenue (PPNR) and a lower tax rate, which balanced out a slightly increased provision for credit losses.
Synovus' core PPNR totaled $272 million, outperforming both the Street's and Stephens' projections by 4%. This was supported by an NII that was $0.06 ahead of expectations, owing to a net interest margin (NIM) expansion of 6 basis points to 3.28%, surpassing the Street's 3.21% and Stephens' 3.24% estimates. The $7.93 billion market cap company maintains a GOOD financial health score according to InvestingPro's comprehensive analysis, though current valuations suggest the stock may be trading above its Fair Value.
The favorable results included 4 basis points of non-recurring adjustments. Core fees were in line with Stephens' predictions and a cent above the consensus, while core expenses were roughly a cent higher than the Street's estimates but aligned with Stephens'.
The company's net charge-offs (NCOs) stood at 26 basis points, at the lower end of their guidance and consistent quarter over quarter. The forecast for the first half of the year remains unchanged, with NCOs expected to be between 25 and 35 basis points. Additionally, criticized and classified loans showed a 1% decrease and currently represent 3.9% of total loans.
Synovus has maintained its year-over-year core revenue and expense growth guidance at 3% to 7% for 2025, with the midpoint of these projections indicating a 1.6% upside to the consensus and a 1.7% upside to Stephens' estimates, bolstered by a stronger-than-anticipated fourth-quarter NII. The company's strong fundamentals are further evidenced by its impressive 51-year streak of consecutive dividend payments, demonstrating remarkable shareholder commitment.
For deeper insights into Synovus's valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with comprehensive analysis and actionable intelligence. The company scheduled a conference call for 8:30 a.m. EST to discuss these results, maintaining its Equal Weight (EW) rating on the stock.
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