Why Synovus (SNV) Stock Is Up Today

NEW YORK (TheStreet) -- Synovus (SNV) was gaining 2.4% to $24.04 Tuesday after receiving an upgrade from KBW.

KBW analyst Jefferson Harralson upgraded Synovus to "outperform" based on the stock's recent pullbacks. Harralson said that Synovus shares have pulled back 9% in 2014, saying that pullback is unwarranted.

The upgrade comes one day after Raymond James upgraded Synovus to "outperform."

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Separately, TheStreet Ratings team rates SYNOVUS FINANCIAL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SYNOVUS FINANCIAL CORP (SNV) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 63.7% when compared to the same quarter one year prior, rising from $29.57 million to $48.42 million.
  • The gross profit margin for SYNOVUS FINANCIAL CORP is currently very high, coming in at 87.23%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SNV's net profit margin of 16.53% significantly trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Commercial Banks industry and the overall market, SYNOVUS FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $87.27 million or 51.18% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, SYNOVUS FINANCIAL CORP has marginally lower results.
  • You can view the full analysis from the report here: SNV Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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