SYF Ties Up to Offer Two Credit Cards: Higher Net Interest Income Ahead?

Synchrony Financial SYF, along with the consumer fintech OnePay, recently joined forces with Walmart WMT to introduce an innovative credit card program. The new offering is likely to launch this fall. Built on the tech giant Mastercard’s MA global payments infrastructure, the program will be accessible to millions of Walmart shoppers and consumers across the United States conducting purchases in-store or online. 

Synchrony and OnePay will launch two distinct credit card options: a general-purpose card, which will act as the flagship offering and can be used anywhere Mastercard is accepted, and a private-label card designed exclusively for purchases at Walmart. These cards will be seamlessly integrated into the OnePay mobile app. Synchrony will utilize its extensive lending experience and advanced digital solutions to provide a seamless experience to customers. 

After the upfront launch and reserve costs, the program is anticipated to cement solid customer relationships and boost sales for Synchrony while generating compelling risk-adjusted returns. Attractive benefits linked with the new card offerings are expected to attract newer customers as well as retain existing ones. 

Increased utilization of the credit cards may bring growth in interest and fees on loans for SYF, which, in turn, is likely to benefit its overall interest income. Its interest income primarily includes earnings from interest and fees on loans. This encompasses merchant discounts, which are typically provided by partners to reimburse SYF—either fully or partially—for the promotional financing extended to their customers. Increased interest income will contribute to higher net interest income, which grew 1.3% year over year in the first quarter of 2025.

How are Synchrony’s Competitors Faring?

Net interest incomes of American Express Company AXP and Capital One Financial Corporation COF, two of SYF’s competitors, continue to benefit on the back of an expanding loan portfolio. 

American Express derives its interest income primarily from its card-issuing business by charging interest on revolving credit card balances held by card members. 

Capital One derives its interest income primarily from lending activities to consumer and commercial clients. This includes interest earned on credit card balances, auto loans and various commercial loans. 

Net interest income of AXP and COF witnessed year-over-year increases of 11% and 7%, respectively, in the first quarter.

SYF’s Share Price Performance

Shares of Synchrony have gained 42.6% in the past year compared with the industry’s 12.1% growth.

Synchrony’s Attractive Valuation

From a valuation standpoint, SYF trades at a forward price-to-earnings ratio of 7.46, lower than the industry’s 18.62. The company carries an impressive Value Score of A.

Estimates for SYF Witness Northward Movement

Synchrony witnessed an uptrend in estimate revisions over the past 60 days. Earnings estimates for 2025 have increased 1.1% to $7.68 per share, while the same for 2026 has risen 1.6% to $8.74.

The consensus estimates for SYF’s 2025 and 2026 EPS and revenues indicate year-over-year increases.

Synchrony currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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