DCF Tool

SYF

Synchrony Financial – All Other Nondepository Credit Intermediation
Synchrony is a premier consumer financial services company. The Company delivers a wide range of specialized financing programs, as well as innovative consumer banking products, across key industries including digital, retail, home, auto, travel, health and pet. Synchrony enables its partners to grow sales and loyalty with consumers. It's one of the largest issuers of private label credit cards in the United States; it also offers co-branded products, installment loans and consumer financing products for small- and medium-sized businesses, as well as healthcare providers.
Analysis Results
Intrinsic Value $52.08
Latest Price $33.41
Relative Value 36% undervalued
Thoughts on this result? Let us know.
Ad
Cash Flow (Billions)
Analysis Parameters
%
%
%
New Ticker
Ad
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -7.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 1.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -7.0%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 2.25 2.06
2024 2.09 1.76
2025 1.95 1.5
2026 1.81 1.28
2027 1.68 1.09
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 24.5 billion. This corresponds to a present value of 14.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.7 billion. Adding in the terminal value gives a total present value of 22.3 billion.

There are presently 429.0 million outstanding shares, so the intrinsic value per share is 52.08.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 98,116,000,000
Current Cash 0
Current Liabilities 91,691,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 6,425,000,000
Change in NCWC -1,515,000,000
EBIT 3,962,000,000
Tax Provision 946,000,000
Depreciation and Amortization 419,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 1,920,000,000
Current Assets 90,033,000,000
Current Cash 0
Current Liabilities 82,093,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 7,940,000,000
Change in NCWC 587,000,000
EBIT 5,503,000,000
Tax Provision 1,282,000,000
Depreciation and Amortization 390,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 5,198,000,000
Current Assets 90,600,000,000
Current Cash 0
Current Liabilities 83,247,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 7,353,000,000
Change in NCWC -3,305,000,000
EBIT 1,797,000,000
Tax Provision 412,000,000
Depreciation and Amortization 383,000,000
Capital Expenditure 0
Unlevered Free Cash Flow -1,537,000,000
Current Assets 100,396,000,000
Current Cash 0
Current Liabilities 89,738,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 10,658,000,000
Change in NCWC 602,000,000
EBIT 4,887,000,000
Tax Provision 1,140,000,000
Depreciation and Amortization 367,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 4,716,000,000
Current Assets 102,170,000,000
Current Cash 0
Current Liabilities 92,114,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 10,056,000,000
Change in NCWC -833,000,000
EBIT 3,644,000,000
Tax Provision 854,000,000
Depreciation and Amortization 302,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 2,259,000,000
Current Assets 92,463,000,000
Current Cash 0
Current Liabilities 81,574,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 10,889,000,000
Change in NCWC 476,000,000
EBIT 3,324,000,000
Tax Provision 1,389,000,000
Depreciation and Amortization 254,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 2,665,000,000
Current Assets 86,424,000,000
Current Cash 0
Current Liabilities 76,011,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 10,413,000,000
Change in NCWC 1,684,000,000
EBIT 3,570,000,000
Tax Provision 1,319,000,000
Depreciation and Amortization 219,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 4,154,000,000
Current Assets 80,260,000,000
Current Cash 0
Current Liabilities 71,531,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 8,729,000,000
Change in NCWC 2,150,000,000
EBIT 3,531,000,000
Tax Provision 1,317,000,000
Depreciation and Amortization 174,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 4,538,000,000
Current Assets 71,808,000,000
Current Cash 0
Current Liabilities 65,229,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 6,579,000,000
Change in NCWC 2,787,000,000
EBIT 3,386,000,000
Tax Provision 1,277,000,000
Depreciation and Amortization 131,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 5,027,000,000
Current Assets 56,917,000,000
Current Cash 0
Current Liabilities 53,125,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,792,000,000
Change in NCWC 1,106,000,000
EBIT 3,142,000,000
Tax Provision 1,163,000,000
Depreciation and Amortization 104,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 3,189,000,000

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.