Synovus's Performance Has Not Been Good Enough To Shift Sentiment

The line between “patient, long-term investor” and “wrong” can be fuzzy in the best of times and is sometimes only visible in hindsight. That’s something to keep in mind with Synovus (SNV), as these shares are down about 30% from the time of the announcement of the FCB deal and have just not worked as a long call. Although I had said back at the time of the deal that, “Synovus is likely to be sitting in the doghouse for a while now”, and “the overhang from the deal announcement will likely last a while”, this is rather more than I had in mind.

I do believe there is a good bank here with better-than-average growth potential, but management’s decision to increase spending in 2020 to take advantage of disruptions and opportunities in its operating footprint (particularly, but not exclusively, the Truist Financial Corp. (TFC) deal) is not what investors wanted to hear. I believe the shares are undervalued on a mid-single digit long-term core growth rate, but this is a stock that really needs some beat-and-raise quarters to boost sentiment.

Continue here for more:
Synovus's Performance Has Not Been Good Enough To Shift Sentiment