DCF Tool

SYF

Synchrony Financial – All Other Nondepository Credit Intermediation
synchrony financial is one of the premier consumer financial services companies in the united states. our roots in consumer finance trace back to 1932, and today we are the largest provider of private label credit cards in the united states based on purchase volume and receivables. we provide a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers to help generate growth for our partners and offer financial flexibility to our customers. through our partners’ more than 300,000 locations across the united states and canada, and their websites and mobile applications, we offer our customers a variety of credit products to finance the purchase of goods and services. our offerings include private label credit cards, promotional financing and installment lending, loyalty programs and optimizer+plus branded fdic-insured sa
Analysis Results
Intrinsic Value $53.94
Latest Price $33.83
Relative Value 37% 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 -7.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 0.6%. 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 414.0 million outstanding shares, so the intrinsic value per share is 53.94.

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

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