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 $598.65
Latest Price $28.19
Relative Value 95% undervalued
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Cash Flow (Billions)
Analysis Parameters
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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 10.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.1%, 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)
2022 6.89 6.67
2023 7.59 7.11
2024 8.35 7.58
2025 9.2 8.08
2026 10.1 8.62
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 304 billion. This corresponds to a present value of 250 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 38.1 billion. Adding in the terminal value gives a total present value of 288 billion.

There are presently 482.0 million outstanding shares, so the intrinsic value per share is 598.65.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 180,066,000,000
Current Cash 0
Current Liabilities 164,186,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 15,880,000,000
Change in NCWC 8,527,000,000
EBIT 11,006,000,000
Tax Provision 2,564,000,000
Depreciation and Amortization 780,000,000
Capital Expenditure 0
Unlevered Free Cash Flow 17,749,000,000
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

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