deepblue4you/E+ via Getty Images
BTIG downgraded shares of Synchrony Financial (NYSE:SYF) and Ally Financial (NYSE:ALLY) each to Neutral from Buy on Monday as analyst Vincent Caintic pointed to a worsening consumer credit landscape.
On Ally (ALLY), whose CFO last week flagged worsening credit conditions among the auto lender’s borrowers, “we don’t anticipate positive catalysts for the rest of 2024 versus waiting until we get more clarity on 2025’s trajectory,” Caintic wrote in a note to clients.
“Macro auto lending data and Ally’s own Trust data make us incrementally worried about further deterioration in Ally’s credit,” he explained. That, in turn, would force Ally (ALLY) to tighten underwriting standards, “which would slow down new originations and therefore lessen the pace of credit improvement.”
Similarly, credit-card issuer Synchrony (SYF) is facing consumer deterioration. That suggests the company may react by further tightening credit underwriting, Caintic wrote in a separate note, “which would likely slow purchase volume and loan growth in its cards.”
Purchase volume already contracted for the first time in Q2 2024, he added, “and we anticipate this may accelerate” going forward.
In Monday morning trading, (ALLY) gained 1.1%, while (SYF) edged down 0.9%.
