UPDATE: J.P. Morgan Initiates Coverage On Synchrony Financial On Attractive Model With Room For Improvement;

In a report published Tuesday, J.P. Morgan analyst Richard Shane initiated coverage on

with an Overweight rating and $30.00 price target. In the report, J.P. Morgan noted, “We are initiating coverage of Synchrony Financial with an Overweight rating and a $30 Dec 15 price target. As the largest independent issuer of private label credit cards in the US, we view Synchrony Financial as a differentiated and compelling consumer finance company. We view the private label credit card business as a more profitable business than general purpose cards (across the cycle, we estimate SYF's risk-adjusted margins are 300-400 basis points better than general purpose credit cards). Over the next two to three years, SYF's separation from GE will likely adversely impact operating leverage and capital. Our expectation is that as SYF demonstrates its long-term earnings and growth profile, the stock will trade at a modest premium to its broader consumer finance peer group.” Synchrony Financial closed on Monday at $24.84.