Synchrony's Health & Wellness Bet: A Long-Term Growth Catalyst?

Consumer financial services giant Synchrony Financial SYF is steadily strengthening its footprint in the Health & Wellness space through its CareCredit brand, a move that could power sustained expansion in the years ahead. With an aging U.S. population and rising demand for health-related financing, the company is positioning itself in one of the most resilient spending categories.

Spending on health is expected to hit $5.6 trillion this year and climb to $8.6 trillion by 2033, according to the Centers for Medicare and Medicaid Services. Synchrony is tapping this opportunity by broadening its portfolio across areas such as audiology, dental, veterinary and general wellness. Average active accounts in Health & Wellness rose 13.3% in 2023, 8% in 2024, and a modest 0.7% in the first half of 2025, while interest and fees on loans advanced 13.6% last year and another 3.2% in 1H25, underscoring steady momentum.

At the end of the second quarter, 15% of Synchrony’s loan receivables were tied to Health & Wellness. Its provider network surpassed 285,000 locations by 2024-end, and with no single partner (excluding the Walgreens program agreement) accounting for more than 0.6% of total interest and fees, the platform benefits from both scale and diversification. Importantly, much of the CareCredit network’s purchase volume comes from repeat customers, highlighting strong stickiness.

Still, long-term success will depend on Synchrony’s ability to manage credit risk, underwriting discipline and regulatory scrutiny. With its expanding network, strategic partnerships and growing demand tailwinds, Health & Wellness looks well-positioned to serve as a long-term growth catalyst for Synchrony.

How Are SYF’s Peers Faring?

Peers of SYF, including American Express Company AXP and Ally Financial Inc. ALLY, are also seeing growth in receivables and interest income.

American Express’ total loans and card member receivables grew 6% year over year in the second quarter of 2025, while its interest on loans advanced 11%. AmEx’s focus on Millennials and Gen-Z consumers will likely boost the figures. Meanwhile, Ally Financial’s total net finance receivables and loans amounted to $129.8 billion at second-quarter-end. The company’s net financing revenues grew to $1.53 billion in the second quarter.

Synchrony’s Price Performance, Valuation and Estimates

SYF shares have gained 17.8% year to date, outperforming the industry’s 5% increase.

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From a valuation standpoint, Synchrony trades at a forward price-to-earnings ratio of 8.70, down from the industry average of 24.77. SYF carries a Value Score of A.

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The Zacks Consensus Estimate for Synchrony’s 2025 earnings is pegged at $8.39 per share, implying a 27.3% jump from the year-ago period.

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The stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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