Synchrony Financial (NYSE: SYF) reported its first-quarter financial results before the markets opened Friday. The company had $0.66 in earnings per share (EPS) and $2.6 billion in revenue, compared to Thomson Reuters consensus estimates of $0.64 in EPS and $2.80 billion in revenue. Synchrony did not give guidance up front for the second quarter, but there are consensus estimates of $0.61 in EPS and revenue of $2.8 billion.

Deposits grew 28%, or $8 billion, in the first quarter to a total of $35 billion. On Synchrony’s balance sheet, the company noted that it had a total liquidity of $20 billion, or 28% of total assets.

Return on assets was 3.0% and return on equity was 20.8%.

For the first quarter, the company had a book value per share of $13.24 and a tangible book value per share of $11.43. Also Synchrony’s estimated Tier 1 Common Equity ratio under Basel I was 16.9%, and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 16.4%.

The efficiency ratio increased to 32.2%, mainly due to increased investments in growth and infrastructure build in preparation for separation from GE.

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Margaret Keane, president and CEO of Synchrony, said:

The momentum we generated over the last several quarters continued in the first quarter. Our value propositions helped to drive strong receivables, deposit, and revenue growth. We are pleased with our organic growth and business development results. We continued to extend major partnerships, signed several new programs across our platforms, and launched compelling promotions to help our partners drive sales growth.

She continued:

We are also capitalizing on new mobile and digital technologies, evidenced by the announcement that our Payment Solutions and CareCredit cards will be available in Samsung Pay when launched. This, coupled with our involvement in Apple Pay, demonstrates our commitment to being in leading edge mobile wallet applications. Our focus remains on finding ways to further enhance the value we deliver to partners and customers and delivering growth across our business platforms.

It appears that Merrill Lynch analysts Kenneth Bruce and Charlie Pratt were right when they downgraded the stock to Neutral from Buy in recent weeks. The firm’s price objective remains static at $33 in the call, but all in all they saw limited upside ahead and showed valuation concerns.

These analysts believe that Synchrony Financial’s share price is approaching fair value. They also said that Synchrony’s management team has had good execution and that it now has a premium valuation against peers and a lack of near-term earnings catalysts.

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Following the release of the earnings report, shares were up 2.9% at $31.65 in premarket trading. However, in early trading Friday the shares were down 1.7% at $30.24. The stock has a consensus analyst price target of $32.97 and a 52-week trading range of $22.60 to $33.96.

The company has a total market cap of roughly $26 billion, and it currently trades at 12 times 2015 estimated earnings.

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