Synovus shares climb on updated Q4 guidance

Shares of Synovus (NYSE:SNV ) Financial Corp. (NYSE:SNV) saw a 3% increase today following the company's updated guidance for the fourth quarter. The regional bank was expected to present at the Goldman Sachs 2024 US Financial Services Conference on December 11, 2024, at 11:20 a.m. ET.

Synovus has provided an adjusted revenue forecast for the fourth quarter in the range of $565 million to $575 million. This projection aligns closely with the Bloomberg consensus estimate of $565.2 million. Additionally, the bank anticipates its common equity Tier 1 (CET1) ratio to be around 10.8%, slightly higher than the estimated 10.6%. Net charge-offs ratio is expected to be between 0.25% and 0.35%, with the estimate at 0.31%.

The company anticipates a net interest margin (NIM) that is stable to slightly higher in the fourth quarter and plans to buy back approximately $50 million in shares during the same period. For the full year, Synovus expects adjusted revenue to decline by about 2% year-over-year, assuming an additional 25 basis point rate cut in December. Looking ahead to 2025, the bank forecasts adjusted revenue growth of 3% to 7%, with net charge-offs rate and CET1 ratio remaining relatively stable in the first half of the year compared to the full year 2024. Expense growth for 2025 is also projected to be within the range of 3% to 7%.

Analysts have weighed in on Synovus's updated guidance. DA Davidson analyst Kevin Fitzsimmons noted the bank's mid-quarter update ahead of this week's conference appearances, including the D.A. Davidson Eastern Bank Summit. Fitzsimmons highlighted a quarter-over-quarter decline in projected loan balances due to high payoff levels but projected a stable-to-higher NIM compared to the third quarter.

Piper Sandler analyst Stephen Scouten has raised the price target on Synovus to $64.00 from $56.00 while maintaining an Overweight rating. Scouten's remarks focused on the updated guidance provided by Synovus, which includes upward revisions in fourth-quarter 2024 revenue and core deposit growth, tempered expectations for fourth-quarter loan growth, stable credit quality metrics, and proactive capital management with expected share repurchases of about $50 million. The new 2025 guidance implies better loan growth trends, supported by the RM expansion plan previously disclosed by Synovus.

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Source: Investing.com