Synovus Financial Corp. Shares Rise on Updated Guidance
Shares of Synovus (NYSE: SNV) Financial Corp. increased by 3% following the company's updated guidance for Q4. The regional bank is set to present at the Goldman Sachs 2024 US Financial Services Conference on December 11, 2024, at 11:20 a.m. ET.
Q4 Revenue Forecast
Synovus has projected an adjusted revenue for Q4 in the range of $565 million to $575 million, closely aligning with the Bloomberg consensus estimate of $565.2 million. The bank anticipates a common equity Tier 1 (CET1) ratio around 10.8%, slightly above the estimated 10.6%. Its net charge-offs ratio is expected between 0.25% and 0.35%, with an estimate at 0.31%.
Other Projections
The company expects a net interest margin (NIM) that is stable to slightly higher and plans to repurchase approximately $50 million in shares in Q4. For the full year, a 2% decline in adjusted revenue year-over-year is anticipated, assuming an additional 25 basis point rate cut in December. Looking ahead to 2025, Synovus forecasts adjusted revenue growth of 3% to 7%, with a stable net charge-offs rate and CET1 ratio in the first half of the year. Expense growth for 2025 is projected to range from 3% to 7%.
Analyst Insights
Analysts have commented on Synovus's updated guidance. DA Davidson's Kevin Fitzsimmons noted a quarter-over-quarter decline in projected loan balances due to high payoff levels, but projected a stable-to-higher NIM. Piper Sandler's Stephen Scouten raised the price target for Synovus to $64.00 from $56.00, maintaining an Overweight rating. Scouten emphasized the updated guidance, which includes
– Upward revisions in Q4 2024 revenue
– Core deposit growth
– Tempered expectations for loan growth
– Stable credit quality metrics
– Planned share repurchases of around $50 million.
The revised guidance for 2025 suggests better loan growth trends supported by the previously disclosed Regional Market (RM) expansion plan.
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