Last week, Synchrony Financial (SYF) shareholders sold off in droves when the private-label credit card giant acknowledged that consumer-credit risks may be lurking over the next year.
Some analysts are taking Synchrony's warning to heart, most recently Barclays analyst Jon Windham. Windham downgraded energy provider SolarCity's (SCTY) shares to Underweight from Equal Weight on Monday, noting "credit quality warning signs" that he attributed to Synchrony's revised guidance for loan losses last week.
But the same prognosis that many consumer borrowers will have more difficulty making their credit payments over the coming year had comparatively little effect on industry peers Capital One (COF) and Discover (DFS), which operate in many of the same businesses.
Shares of Synchrony, the nation's largest distributor of private-label credit cards, are down more than 15% over past week, following Tuesday's announcement that it has boosted estimates by 0.2% to 0.3% of so-called "charge-offs" at its retail partners over the next year, which essentially equate to provisions put aside for loan losses.
"I think the consumer's ability to cure themselves when they get into those later due stages has been challenged," Synchrony's CFO Brian Doubles said at an industry conference last week, noting "a little bit of deterioration" could prompt incremental charge-offs over the next 12 months.
Meanwhile, Discover and Capital One shareholders remain relatively unfazed, with shares down 3% and 6%, respectively, since last week's conference, as management continues to maintain such consumer-credit risks are not lurking.
Discover's president and COO Roger Hochschild said last week that thre are "still no signs of deterioration in terms of credit quality" when looking at charge-offs over the next six months. And on Discover's first-quarter earnings call with analysts, CFO Mark Graf said that the "credit backdrop continues to remain benign" and has been driven by years of loan growth.
Capital One CEO Richard Fairbank also has said charge-offs have reached their peak in the first quarter, noting on the company's first-quarter earnings call that loan growth is set to continue through 2015.
But some analyst argue that comparatively lax credit standards since the initial years following the 2008 financial crisis have exposed companies such as Synchrony to greater chances of loan losses.
"Loans underwritten in '09 through '11 historically had lower loss rates, but newer issuances are getting back to lower credit," Morningstar analyst Daniel Werner said in an interview Real Money after Synchrony's decline last week.