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Bread Financial Holdings
(NYSE:BFH)
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Rating:74Outperform
Price Target:
$119.00
▲(14.08% Upside)
Action:Reiterated
Date:07/28/26
BFH scores well primarily on improving fundamentals (profitability rebound and better leverage) and a constructive earnings outlook with raised guidance and strengthening credit metrics. The technical picture is supportive with price firmly above major moving averages, and valuation is favorable given the low P/E. The main constraints are historical earnings volatility and softer recent free-cash-flow momentum.
Positive Factors
Improving credit metrics
Sustained improvement in delinquencies, net loss rate and reserve coverage materially reduces credit risk and loss volatility. Over the next 2–6 months, better underwriting and reserve positioning should support steadier earnings, lower provisioning shocks and improved capital retention.
Negative Factors
Free cash flow momentum weakening
A notable YoY drop in free cash flow and inconsistent operating cash coverage reduce confidence in near-term cash available for buybacks, debt service or discretionary investment. Persistent FCF pressure can constrain capital allocation and heighten sensitivity to adverse credit cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving credit metrics
Sustained improvement in delinquencies, net loss rate and reserve coverage materially reduces credit risk and loss volatility. Over the next 2–6 months, better underwriting and reserve positioning should support steadier earnings, lower provisioning shocks and improved capital retention.
Read all positive factors
Bread Financial Holdings (BFH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.15B
Dividend Yield0.83%
Average Volume (3M)711.92K
Price to Earnings (P/E)8.3
Beta (1Y)1.35
Revenue Growth0.85%
EPS Growth117.85%
CountryUS
Employees6,000
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)13.01
Shares Outstanding38,419,270
10 Day Avg. Volume662,656
30 Day Avg. Volume711,918
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.00
Price to Sales (P/S)0.71
P/FCF Ratio1.59
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$116.25Price Target Upside11.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)12.05
Revenue Forecast (FY)$3.96B
Bread Financial Holdings Business Overview & Revenue Model
Company Description
Bread Financial Holdings, Inc. offers cutting-edge payment and credit solutions to consumers and various industries throughout North America. Their services include comprehensive financing for credit cards and other loans, which involves managing ...
How the Company Makes Money
Bread Financial primarily makes money by issuing and servicing credit products—especially private-label and co-brand credit cards—often in partnership with merchants. A major revenue stream is finance charges and interest income earned on revolvin...
Bread Financial Holdings Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call highlighted broadly positive operational and financial momentum: revenue, PPNR, credit sales, loan growth, deposits, tangible book value and credit metrics all improved materially year-over-year. Management raised full-year growth and credit guidance, maintained strong liquidity and capital positions, and continues strategic investments in technology and AI. Offsetting items include increasing retailer share arrangements that compress certain noninterest income, lower billed late fees from improving delinquencies, modest near-term expense increases to support growth, and sensitivity to macro and seasonal variability (notably a softer July). Overall, positives (strong earnings growth, improving credit quality, deposit funding milestone, upgraded guidance) notably outweigh the challenges.Positive Updates
Net Income and EPS
Net income of $146 million in Q2 2026, up $7 million or 5% year-over-year, with diluted EPS of $3.55.
Negative Updates
Noninterest Income Pressure from RSA
Noninterest income declined $1 million, or 4% year-over-year, driven by higher retailer share arrangements (RSAs) tied to stronger credit sales and profit sharing, which compresses that line even as it signals partner performance.
Read all updates
Q2-2026 Updates
Positive
Negative
Net Income and EPS
Net income of $146 million in Q2 2026, up $7 million or 5% year-over-year, with diluted EPS of $3.55.
Read all positive updates
Company Guidance
Management raised 2026 guidance modestly, now expecting average credit card and other loan growth of up low- to mid-single digits (with end-of-period loans likely higher), total revenue growth up low- to mid-single digits, net interest margin flat to slightly higher vs. 2025, and an improved full‑year net loss rate of 7.0%–7.1% (with Q3 net loss ~30 bps better than Q2); they reiterated a normalized effective tax rate of 25%–27% and expect positive operating leverage for 2026 excluding pretax debt‑repurchase impacts. Key balance‑sheet and capital metrics cited include CET1 of 12.9% at quarter end, total loss absorption capacity of 24.6% of loans, average direct‑to‑consumer deposits at 50% of funding, $6.7B of liquidity (~30% of assets), the recent $135M 8.875% preferred issuance, $241M of common buybacks in the quarter (2.8M shares) with $449M remaining authorization and a planned ~$25M July repurchase, and a path toward long‑term mid‑20s ROTCE.Bread Financial Holdings Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
68
Positive
Cash Flow
61
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.75B | 4.70B | 4.80B | 5.17B | 4.37B | 3.27B |
| Gross Profit | 3.04B | 2.98B | 2.44B | 3.07B | 2.28B | 1.68B |
| EBITDA | 740.00M | 694.00M | 471.00M | 1.08B | 413.00M | 1.17B |
| Net Income | 568.00M | 518.00M | 277.00M | 718.00M | 223.00M | 801.00M |
Balance Sheet | ||||||
| Total Assets | 22.45B | 22.66B | 22.89B | 23.14B | 25.41B | 21.75B |
| Cash, Cash Equivalents and Short-Term Investments | 3.68B | 3.77B | 3.85B | 3.76B | 3.99B | 3.22B |
| Total Debt | 3.29B | 4.39B | 5.68B | 5.44B | 8.13B | 7.58B |
| Total Liabilities | 19.09B | 19.34B | 19.84B | 20.22B | 23.14B | 19.66B |
| Stockholders Equity | 3.37B | 3.33B | 3.05B | 2.92B | 2.27B | 2.09B |
Cash Flow | ||||||
| Free Cash Flow | 1.65B | 2.09B | 1.86B | 1.99B | 1.78B | 1.46B |
| Operating Cash Flow | 1.66B | 2.09B | 1.86B | 1.99B | 1.85B | 1.54B |
| Investing Cash Flow | -1.52B | -1.37B | -1.17B | 788.00M | -5.11B | -1.69B |
| Financing Cash Flow | 2.95M | -807.00M | -592.00M | -3.09B | 3.27B | 608.00M |
Bread Financial Holdings Technical Analysis
Positive
104.31
Price Trends
98.85
Positive
89.70
Positive
79.81
Positive
Market Momentum
1.18
Negative
61.95
Neutral
84.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFH, the sentiment is Positive. The current price of 104.31 is above the 20-day moving average (MA) of 101.73, above the 50-day MA of 98.85, and above the 200-day MA of 79.81, indicating a bullish trend. The MACD of 1.18 indicates Negative momentum. The RSI at 61.95 is Neutral, neither overbought nor oversold. The STOCH value of 84.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BFH.
Bread Financial Holdings Risk Analysis
Bread Financial Holdings disclosed 60 risk factors in its most recent earnings report. Bread Financial Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bread Financial Holdings Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.20B | 35.82 | 90.93% | ― | 46.14% | 38.52% | |
74 Outperform | $4.15B | 8.31 | 17.04% | 0.86% | 0.85% | 117.85% | |
74 Outperform | $6.33B | 17.78 | 25.76% | ― | 17.65% | 43.92% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
56 Neutral | $1.98B | 5.13 | 47.95% | 11.44% | -1.65% | -53.21% | |
52 Neutral | $2.33B | -3.42 | -1.66% | ― | ― | ― |
* Financial Sector Average
BFH
Bread Financial Holdings
108.07
49.40
84.21%
WU
Western Union
6.36
-0.83
-11.56%
ENVA
Enova International
254.14
151.54
147.70%
LU
Lufax Holding
1.56
-1.32
-45.83%
SEZL
Sezzle Inc.
154.75
-2.24
-1.43%
Bread Financial Holdings Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresPrivate Placements and Financing
Bread Financial Reports Strong Second-Quarter Results and Outlook
Positive
Jul 23, 2026
On July 23, 2026, Bread Financial reported strong second-quarter results for the period ended June 30, 2026, highlighted by 11% year-over-year credit sales growth, 3% average loan growth and 7% revenue growth, which lifted net income to $146 milli...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports Growing Loan Portfolio, Credit Normalization
Neutral
Jul 23, 2026
On July 23, 2026, Bread Financial reported a June 30, 2026 performance update showing end‑of‑period credit card and other loans of $18.5 billion and average loans of $18.4 billion, with average balances up 4.1% year over year for the m...
Business Operations and StrategyExecutive/Board Changes
Bread Financial announces leadership transition in commercial operations
Neutral
Jul 15, 2026
Bread Financial announced on July 14, 2026 that Executive Vice President and Chief Commercial Officer Valerie Greer will retire around February 19, 2027, following nearly four decades in financial services and six years at the company. Her retirem...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports May 2026 Loan Growth, Credit Improvement
Positive
Jun 10, 2026
Bread Financial reported a May 2026 performance update on June 10, 2026, highlighting modest year-over-year loan growth and improving credit metrics. Average credit card and other loans rose 2.6% to $18.2 billion, while end-of-period loans reached...
Executive/Board ChangesShareholder Meetings
Bread Financial Holds 2026 Virtual Annual Stockholders Meeting
Positive
May 22, 2026
Bread Financial Holdings, Inc. held its 2026 annual meeting of stockholders on May 19, 2026, in a virtual-only format, with approximately 91% of outstanding shares represented, and stockholders elected nine directors to serve until the 2027 annual...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports Improving Credit Metrics and Loan Growth
Positive
May 15, 2026
Bread Financial Holdings on May 15, 2026 reported that for the month ended April 30, 2026, end-of-period credit card and other loans rose to $18.1 billion, with average loans up 2.0% year over year after having declined 1.6% a year earlier. Net pr...
Private Placements and FinancingRegulatory Filings and Compliance
Bread Financial Issues New Series B Preferred Shares
Positive
May 12, 2026
On May 11, 2026, Bread Financial Holdings filed a Certificate of Designations in Delaware, effective May 12, 2026, establishing the terms of its 8.875% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, with a $1,000 per share li...
Business Operations and StrategyPrivate Placements and Financing
Bread Financial Prices Series B Preferred Stock Offering
Positive
May 6, 2026
On May 5, 2026, Bread Financial Holdings priced an underwritten public offering of 4.8 million depositary shares, each representing a 1/40th interest in its 8.875% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, with a $25 liq...
Business Operations and StrategyPrivate Placements and Financing
Bread Financial Launches Preferred Depositary Share Public Offering
Neutral
May 5, 2026
On May 5, 2026, Bread Financial Holdings, Inc. announced the launch of an underwritten public offering of depositary shares, each representing a 1/40th interest in its Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, with a $25...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.