On Tuesday, Synovus (NYSE:SNV) Financial Corp (NYSE: SNV) saw its price target increased by DA Davidson from $43.00 to $47.00 while retaining a Buy rating on the stock. The company recently provided a mid-quarter update prior to its appearance at this week's D.A.
Davidson Financial Institutions Conference. A key highlight from the update was the expanded impact of Synovus's RWA Project, which is now expected to reduce risk-weighted assets (RWAs) by $2 billion to $2.4 billion.
The reduction in RWAs will allow the company to utilize approximately $200 million to $240 million of its common equity tier 1 (CET1) capital. This capital will be used to offset an anticipated $275 million recognized loss from the sale of $1.6 billion of available-for-sale (AFS) securities. Following the reinvestment of the proceeds, Synovus projects a five-year earnback period.
The financial institution's earnings per share (EPS) impact has been estimated by DA Davidson, which expects an increase of $0.18 for the year 2024 and $0.30 for 2025. The revised price target of $47 reflects the anticipated positive outcomes from the RWA Project and subsequent financial maneuvers.
InvestingPro Insights
As Synovus Financial Corp (NYSE: SNV) continues to navigate its strategic financial initiatives, recent metrics from InvestingPro offer additional context for investors. The company's market capitalization stands at a robust $5.67 billion, with an attractive P/E ratio of 12.83 reflecting its earnings over the last twelve months as of Q1 2024. This is complemented by a strong operating income margin of 39.12%, indicating efficient management of its operations relative to its peers.
InvestingPro Tips highlight the company's significant return over the last week, with a 1-week price total return of 8.13%, and a remarkable 6-month price total return of 41.51%. These returns demonstrate the market's positive reaction to the company's recent moves. Additionally, Synovus has upheld its commitment to shareholders through consistent dividend payments for 51 consecutive years, boasting a current dividend yield of 3.93%. This, along with the analysts' prediction of profitability for the year, may offer reassurance to investors looking for stable income and growth prospects.
For those seeking deeper analysis and further tips, InvestingPro provides more insights that could be valuable in making informed investment decisions. There are additional InvestingPro Tips available at https://www.investing.com/pro/SNV. To access these insights and benefit from the full suite of features, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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