NEW YORK ( TheStreet) -- Synovus Financial (NYSE: SNV) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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- SYNOVUS FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SYNOVUS FINANCIAL CORP continued to lose money by earning -$0.16 versus -$1.40 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus -$0.16).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 201.2% when compared to the same quarter one year prior, rising from -$39.00 million to $39.45 million.
- Despite the weak revenue results, SNV has outperformed against the industry average of 31.0%. Since the same quarter one year prior, revenues slightly dropped by 7.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, SYNOVUS FINANCIAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- SNV has underperformed the S&P 500 Index, declining 6.67% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
-- Written by a member of TheStreet Ratings Staff