Sell Rating Issued for Bread Financial Holdings Amid Higher Net Charge-Offs and External Challenges

In a report released today, Ryan Nash from Goldman Sachs maintained a Sell rating on Bread Financial Holdings (BFH – Research Report), with a price target of $61.00.

Ryan Nash has given his Sell rating due to a combination of factors impacting Bread Financial Holdings. Despite the company reporting solid results for May, there were concerns about the net charge-offs (NCOs) which were higher than anticipated. This increase was partly due to the impact of hurricanes Helene and Milton, which affected the fourth quarter of 2024, resulting in a $13 million headwind for the second quarter NCOs.
Additionally, while delinquency rates (DQs) performed better than expected, the end-of-period (EOP) loan receivables were below expectations, showing a decrease both month-over-month and year-over-year. Although average loans were in line with expectations, the mixed performance in loan growth and the adverse impact of external factors such as hurricanes contributed to the cautious outlook, leading to the Sell rating.