Synovus Stock Rises with Updated Q4 Guidance
Shares of Synovus Financial Corp. (NYSE: SNV) rose by 3% today following the company's updated guidance for the fourth quarter. The regional bank is expected to present at the Goldman Sachs 2024 U.S. Financial Services Conference on December 11, 2024, at 11:20 AM ET.
Synovus announced its adjusted revenue estimate for the fourth quarter to be in the range of $565 million to $575 million. This projection is quite close to the Bloomberg consensus estimate of $565.2 million. Additionally, the bank expects its common equity tier 1 (CET1) capital ratio to be approximately 10.8%, slightly above the estimated 10.6%. The net charge-off rate is expected to be between 0.25% and 0.35%, with an estimate of 0.31%.
The company anticipates that its net interest margin (NIM) will remain stable or slightly increase in the fourth quarter, and it plans to conduct approximately $50 million in stock repurchases during the same period. For the full year, Synovus expects its adjusted revenue to decrease by about 2% year-over-year, assuming an additional 25 basis point interest rate reduction in December. Looking ahead to 2025, the bank projects adjusted revenue growth between 3% and 7%; the net charge-off rate and CET1 ratio are expected to remain relatively stable in the first half of the year compared to the entirety of 2024. Expense growth is also projected to be between 3% and 7% for 2025.
Analysts have commented on Synovus's updated guidance. D.A. Davidson analyst Kevin Fitzsimmons highlighted the bank's mid-quarter update ahead of this week's conference appearances, which include the D.A. Davidson Eastern Bank Conference. Fitzsimmons indicated that a quarterly decline in loan balances is anticipated due to high payback levels, while the NIM is expected to remain stable or increase compared to the third quarter.
Piper Sandler analyst Stephen Scouten raised the price target for Synovus from $56.00 to $64.00 while maintaining an Overweight rating. Scouten's comments focused on the updated guidance provided by Synovus, which includes upward revisions for fourth-quarter 2024 revenue and core deposit growth, moderate expectations for fourth-quarter loan growth, stable loan quality metrics, and proactive capital management with expectations for around $50 million in stock repurchases. The new 2025 guidance implies improved loan growth trends supported by Synovus's previously announced RM expansion plan.