Synchrony Financial SYF recently announced an enhanced partnership with Atlanticus Holdings Corporation ATLC. Atlanticus provides second-look point-of-sale consumer credit programs via its bank relationships under its Fortiva brand. This partnership will allow SYF to offer Atlanticus’ private label credit cards and installment loans as the preferred second-look financing solution across its network of merchants.

This move bodes well for SYF as it will attract a large customer base who may not receive any offers from SYF. They can get a quick second look at a financial product from Atlanticus. Customers who are responsible and repay funds at the proper time might get a Synchrony credit product. This partnership will also enable SYF to cater to the financially underserved customer base. Higher sales volumes for SYF’s merchants may lead to improved interest and loan fees. This partnership builds on SYF’s existing partnership with Atlanticus since 2019.

Atlanticus’ technology and analytics are expected to improve accuracy and provide a streamlined enrollment process for SYF merchants. Merchants will also benefit from an attractive merchant pricing structure with Atlanticus. Move like this will aid SYF in bringing more business to its merchant network and help it build loyalty through attractive products and customer experience.

SYF undertakes several partnerships to enhance its offerings and attract customers. Its total loan receivables increased 11.6% year over year in the first quarter. Move like this is expected to aid the company in achieving its loan receivables growth outlook of around 6-8% in 2024.

Price Performance

Shares of Synchrony have gained 17% in the past six months against the industry’s 2.5% decline.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Synchrony currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader Finance space are StepStone Group LP STEP and Axos Financial, Inc. AX. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for StepStone Group’s 2024 earnings is pegged at $1.70 per share, which remained stable over the past week. STEP beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 15.7%.

The Zacks Consensus Estimate for Axos Financial’s 2024 earnings is pegged at $7.72 per share, which indicates a year-over-year increase of 52.3%. The estimate remained stable over the past month. AX beat earnings estimates in the past four quarters, with an average surprise of 12.6%.