Synovus Financial Corp. Ready to Breakout? – June 4, 2021

Synovus Financial Corp. (SNV) operates dozens of community banks throughout Georgia, Alabama, Florida, Tennessee, and South Carolina. Concentrating on commercial loans and commercial real estate, the bank uses its small-town image to establish strong relationships with its small-business customers.

The company has been benefiting from increased loan-growth. Over the near-term, improving interest income and credit quality is supporting the company’s financials, while strategic investments in merger & acquisitions will aid growth over the long-term.

SNV’s debt situation looks solid with a debt-to-equity ratio of only 0.2. The company is also highly profitable with a net margin of 25.8%. Earnings have grown an average of 15% per year over the past five years and are expected to soar 352.2% in the current quarter.

The stock appears undervalued with a trailing P/E of 14.88 and a forward P/E of 11.79, which is impressive considering the stock has risen 142.8% over the past year. This is represented in the chart below.

Take a look at the 1-year chart of SNV below with added notations:

SNV has been on a roll since its July low last year, but the stock recently has been unable to break the $50 resistance level (red), which is also its 52-week high.

A solid close above that $50 mark should lead to much higher prices for SNV.The possible long position on the stock would be on a breakout above that level with a stop placed under it.

Author: Christian Tharp, CMT