What Happened

Synchrony Financial (SYF 2.48%) saw its stock price plummet 18.6% in March, according to S&P Global Market Intelligence. This financial company was well off the pace of the S&P 500, which was up 3.6% for the month. As of April 4, Synchrony was down about 23% year to date, trading at around $35 per share.

So what

Synchrony Financial is one of the leading credit card issuers in the country, so it lends money to credit card users for their purchases. But it's different than many others in the space because it primarily offers store cards, which can only be used for purchases at a specific store.

An investor looking at data on a computer monitor.

Image source: Getty Images.

It has more than 100 store cards, including Amazon, Walmart, and TJX, to name a few. It also offers some 30 different store-branded cards, which are credit cards with the storeʻs logo on them that provide rewards and perks when used there, but they can also be used on the broader Mastercard or Visa networks.

Synchrony is coming off a strong fourth quarter. Net income climbed 10%, purchase volume hit a record (up 18%), loans were up 4%, new accounts jumped 20%, net interest margin rose 16%, and the efficiency ratio fell 4 percentage points to 41%.

Most of the stock price decline came at the beginning of the month, coinciding with Russiaʻs invasion of Ukraine and heightened concerns about inflation and an economic slowdown. Synchrony relies on consumer spending, so these issues could impact revenue.

Now what

The stock price jumped significantly since the Federal Reserve Board raised interest rates on March 16 in an attempt to curb the effects of inflation. But it's fallen since that spike, as geopolitical concerns remain.

Some analysts, like Morgan Stanley, have downgraded Synchrony based on these macroeconomic fears stemming from a protracted war. Morgan Stanley downgraded Synchrony from overweight to equal weight.

Financial stocks are cyclical, and a period that looked to be a good one for stocks like Synchrony -- a growing economy with rising interest rates -- could be derailed by the war and its effects on our economy. High inflation and recession concerns would likely curtail consumer spending.

Otherwise, there are a lot of positive signs, with delinquencies down, strong account growth, and a lower efficiency ratio. Keep an eye out for the first-quarter earnings report in the next couple of weeks for more insight into what to expect.