Bread Financial Holdings (BFH)
NYSE:BFH
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Bread Financial Holdings
(NYSE:BFH)
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Rating:72Outperform
Price Target:
$81.00
▲(2.99% Upside)
Action:ReiteratedDate:03/11/26
The score is driven primarily by improving financial performance and an attractive low P/E valuation, supported by a constructive (but cautious) 2026 outlook and continued credit improvement. These positives are tempered by neutral-to-weak near-term technical momentum and ongoing sensitivity to credit/rate conditions given still-meaningful leverage and loss levels above long-term targets.
Positive Factors
Cash generation
Strong and improving operating and free cash flow provide durable internal funding for debt reduction, share repurchases, dividend increases and technology investment. Reliable cash generation cushions cyclical credit volatility and supports capital returns without relying solely on external funding.
Negative Factors
Elevated credit losses
Net loss and reserve rates remain meaningfully above historical targets, implying continued credit-related earnings drag and the need for higher capital cushions. Persistent elevated loss rates constrain sustained margin expansion and require ongoing underwriting and collection discipline to normalize.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Strong and improving operating and free cash flow provide durable internal funding for debt reduction, share repurchases, dividend increases and technology investment. Reliable cash generation cushions cyclical credit volatility and supports capital returns without relying solely on external funding.
Read all positive factors
Bread Financial Holdings (BFH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.39B
Dividend Yield1.12%
Average Volume (3M)657.00K
Price to Earnings (P/E)6.4
Beta (1Y)1.28
Revenue Growth-4.32%
EPS Growth58.34%
CountryUS
Employees6,000
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)2.07
Shares Outstanding43,115,116
10 Day Avg. Volume556,214
30 Day Avg. Volume656,999
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)1.00
Price to Sales (P/S)0.71
P/FCF Ratio1.59
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue0.93
Enterprise Value/Gross Profit1.47
Enterprise Value/Ebitda6.30
Forecast
1Y Price Target
$83.38Price Target Upside6.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)10.18
Revenue Forecast (FY)$3.96B
Bread Financial Holdings Business Overview & Revenue Model
Company Description
Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account ...
How the Company Makes Money
Bread Financial primarily makes money by originating and servicing credit card receivables through private label and co-brand card programs with partner merchants/brands. Key revenue streams typically include: (1) Net interest income: interest cha...
Bread Financial Holdings Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call highlighted multiple tangible operational and financial improvements—new partner signings, deposit growth, capital returns, rating upgrades, improving credit metrics, rising tangible book value, and positive operating leverage—while acknowledging short-term headwinds from debt repurchase costs, flat-to-slow loan growth due to high payment rates, and revenue pressure from lower billed fees and macro/rate sensitivity. Management provided a constructive 2026 outlook with low-single-digit growth targets and continued focus on efficiency and credit discipline.Positive Updates
New Brand Signings and Product Launches
Signed seven major new brand partners in 2025 (including Bed Bath & Beyond, Furniture First, Raymour & Flanigan) and launched relationships such as crypto.com and BreadPay integrations with Cricket Wireless and Vivint, expanding vertical and product reach.
Negative Updates
Debt Repurchase Costs and One-Time Charges
Q4 included a $42 million post-tax impact from debt repurchases; other expenses increased by $46 million in Q4 primarily due to debt repurchase impacts, creating volatility in reported results and increasing near-term expense comparisons.
Read all updates
Q4-2025 Updates
Positive
Negative
New Brand Signings and Product Launches
Signed seven major new brand partners in 2025 (including Bed Bath & Beyond, Furniture First, Raymour & Flanigan) and launched relationships such as crypto.com and BreadPay integrations with Cricket Wireless and Vivint, expanding vertical and product reach.
Read all positive updates
Company Guidance
Management guided 2026 for average credit card and other loans growth of up low single digits and total revenue to be up low single digits (largely in line with loan growth), with baseline net interest margin near to slightly above the full‑year 2025 rate (Q4 NIM was 18.9%) but exposed to pressure from expected Fed cuts, lower billed fees and product/risk‑mix shifts; they expect a full‑year net loss rate of 7.2%–7.4%, a normalized effective tax rate of 25%–27%, and adjusted total expenses (excluding debt‑repurchase costs) to be slightly down sequentially from the Q4 adjusted expense run‑rate of $500 million, delivering positive operating leverage (excluding pretax debt repurchase impacts). Management said loan growth will be supported by a stable partner base and new launches, and that these assumptions, plus ongoing capital optimization (including possible preferred issuance), position the company to progress toward its longer‑term mid‑20% ROTC target.Bread Financial Holdings Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
67
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.70B | 4.80B | 5.17B | 4.37B | 3.27B |
| Gross Profit | 2.98B | 2.44B | 3.07B | 2.28B | 2.06B |
| EBITDA | 694.00M | 471.00M | 1.08B | 413.00M | 1.17B |
| Net Income | 518.00M | 277.00M | 718.00M | 223.00M | 801.00M |
Balance Sheet | |||||
| Total Assets | 22.66B | 22.89B | 23.14B | 25.41B | 21.75B |
| Cash, Cash Equivalents and Short-Term Investments | 3.77B | 3.85B | 3.76B | 3.99B | 3.22B |
| Total Debt | 4.39B | 5.68B | 5.44B | 8.13B | 7.58B |
| Total Liabilities | 19.34B | 19.84B | 20.22B | 23.14B | 19.66B |
| Stockholders Equity | 3.33B | 3.05B | 2.92B | 2.27B | 2.09B |
Cash Flow | |||||
| Free Cash Flow | 2.09B | 1.86B | 1.99B | 1.78B | 1.46B |
| Operating Cash Flow | 2.09B | 1.86B | 1.99B | 1.85B | 1.54B |
| Investing Cash Flow | -1.37B | -1.17B | 788.00M | -5.11B | -1.69B |
| Financing Cash Flow | -807.00M | -592.00M | -3.09B | 3.27B | 608.00M |
Bread Financial Holdings Technical Analysis
Positive
78.65
Price Trends
73.72
Positive
72.53
Positive
66.51
Positive
Market Momentum
0.62
Negative
60.90
Neutral
78.34
Neutral
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 78.65 is above the 20-day moving average (MA) of 73.68, above the 50-day MA of 73.72, and above the 200-day MA of 66.51, indicating a bullish trend. The MACD of 0.62 indicates Negative momentum. The RSI at 60.90 is Neutral, neither overbought nor oversold. The STOCH value of 78.34 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.35B | 16.17 | 91.62% | ― | 88.74% | 106.14% | |
72 Outperform | $3.39B | 6.42 | 16.09% | 1.12% | -4.32% | 58.34% | |
71 Outperform | $3.69B | 12.62 | 24.45% | ― | 21.10% | 76.12% | |
68 Neutral | $2.78B | 6.09 | 53.92% | 10.18% | -2.51% | 17.47% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $1.73B | 16.10 | 9.47% | ― | 9.68% | 94.85% | |
| ― | $2.33B | -2.45 | 0.96% | ― | ― | ― |
* Financial Sector Average
BFH
Bread Financial Holdings
78.65
31.06
65.26%
WU
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8.87
-0.12
-1.28%
LC
LendingClub
15.02
5.09
51.26%
ENVA
Enova International
147.42
51.18
53.18%
LU
Lufax Holding
1.91
-0.67
-25.97%
SEZL
Sezzle Inc.
69.49
31.34
82.15%
Bread Financial Holdings Corporate Events
Business Operations and StrategyFinancial Disclosures
Bread Financial Highlights Improving Credit Metrics and Loan Growth
Positive
Mar 11, 2026
On March 11, 2026, Bread Financial Holdings reported a modest 1% year-over-year increase in average credit card and other loans to $18.3 billion for the month ended February 28, 2026, with end-of-period loans at $18.1 billion. Net principal losses...
Business Operations and StrategyStock Buyback
Bread Financial Expands Share Repurchase Authorization, Signals Confidence
Positive
Feb 26, 2026
On February 26, 2026, Bread Financial Holdings, Inc. announced that its board had approved a $600 million increase to its existing share repurchase authorization, lifting the total available capacity to $765 million. As of December 31, 2025, the c...
Business Operations and StrategyStock Buyback
Bread Financial Announces Capped Call Unwind Share Retirement
Neutral
Feb 18, 2026
On February 17, 2026, Bread Financial Holdings, Inc. entered into privately negotiated agreements with the financial institutions that were parties to its capped call transactions related to its 4.25% Convertible Senior Notes due 2028, which had n...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports Stable Loans, Slightly Improved Credit Quality
Positive
Feb 10, 2026
On February 10, 2026, Bread Financial reported January 2026 portfolio metrics showing essentially flat average credit card and other loan balances year over year at about $18.5 billion. End‑of‑period credit card and other loans were $1...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresPrivate Placements and Financing
Bread Financial Posts Strong 2025 Results, Raises Shareholder Returns
Positive
Jan 29, 2026
On January 29, 2026, Bread Financial reported fourth-quarter and full-year 2025 results showing solid profitability and capital return alongside a stronger balance sheet. For 2025, the company generated $518 million in net income available to comm...
Financial Disclosures
Bread Financial Reports Slightly Improved Credit Quality Metrics
Neutral
Jan 29, 2026
On January 29, 2026, Bread Financial reported key credit performance metrics for the period ended December 31, 2025, showing end-of-period credit card and other loans of $18.8 billion and average loans of $18.5 billion for December, both down 1% y...
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.