One Reason Why Synchrony (SYF) Stock is Lower Today
NEW YORK (TheStreet) -- Shares of Synchrony Financial (SYF) - Get Report are down 0.79% to $25.15 on Tuesday afternoon as Morgan Stanley lowered its weight in the stock to 2% from 3% following disappointing commentary at its recent financial conference.
The firm also cut its recommended holdings of financial stocks to "equal weight" from "overweight" today, Barron's reports.
"We are downgrading financials to equal weight from overweight and reducing our exposure from 18% to 16%, vs. the bench weight of 15.8%. We worry about being the strategist at the bulge bracket firm who becomes the counter-indicating idiot with this downgrade," Morgan Stanley wrote in an analyst note.
The firm said it was "overweight" on the sector for the first time in seven years in April 2015. After a brief period of success, the industry has been a substantial drag on the portfolio, Barron's added.
"The interest rate environment is still a substantial driver, and headlines like 'Clinton will meet with Warren to discuss Wall Street' make sales of indigestion-relief medication skyrocket from Wall Street up most of Park Avenue," Morgan Stanley said.
Synchrony is a Stamford, CT-based consumer financial services company.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and growth in earnings per share.
But the team also finds weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SYF