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Pro Analysis

Deutsche likes Synchrony, says Trump to boost consumer finance profits by up to 50 percent

Synchrony Financial opens its IPO at the NYSE on July 30, 2014.
Source: Synchrony Financial | Twitter
Synchrony Financial opens its IPO at the NYSE on July 30, 2014.

Investors should buy credit card company Synchrony Financial due to the implications of Donald Trump's economic agenda, which could significantly boost the earnings of the consumer finance sector, according to Deutsche Bank.

"COF / SYF receive top scores from our post-election [scenarios] scorecard. Both would likely see an outsized benefit from slower consumer credit normalization given more exposure to non-prime," analyst David Ho wrote in a note to clients Wednesday.

"SYF has the edge on leverage to higher retail spending growth. Our Top Pick remains SYF."

The analyst laid out earnings upside potential for various Trump proposals and outcomes such as lowering corporate taxes, job growth, rising interest rates and less regulation. His baseline case is 20 percent earnings upside with up to 50 percent possible if all the "potential impacts materialize."