Bread Financial Holdings (BFH) AI Stock Analysis

• Market Cap: $3.21B
• Dividend Yield: 1.12%
• Average Volume (3M): 906.97K
• Price to Earnings (P/E): 6.8
• Beta (1Y): 1.31
• Revenue Growth: -4.32%
• EPS Growth: 58.34%
• Country: US
• Employees: 6,000
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 2.07
• Shares Outstanding: 43,115,116
• 10 Day Avg. Volume: 708,196
• 30 Day Avg. Volume: 906,967
• PEG Ratio: 0.06
• Price to Book (P/B): 1.00
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 1.59
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 0.86
• Enterprise Value/Gross Profit: 1.36
• Enterprise Value/Ebitda: 5.84
• 1Y Price Target: $83.25
• Price Target Upside: 16.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 10.09
• Revenue Forecast (FY): $3.97B

• Rating: 73 Outperform
• Price Target: $81.00 ▲(13.19% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by improving financial performance and strong cash generation, reinforced by a constructive earnings-call outlook and operational progress. Valuation is a notable positive due to the low P/E, while the main constraint is mixed near-term technical momentum and ongoing credit/leverage sensitivity.

Positive Factors

Strong cash generation

Operating cash flow rose to roughly $2.09B in 2025 and free cash flow tracked net income, indicating high earnings quality. Durable free cash flow supports share repurchases, dividends, capital investment and reserve funding, improving financial flexibility across business cycles.

Improved leverage and ratings

A meaningful reduction in total debt and a lower debt-to-equity ratio, combined with refinancing that cut funding costs and credit rating upgrades, materially reduces refinancing and interest-rate risk. This stronger capital structure supports longer-term risk tolerance and shareholder returns.

Partner expansion and diversification

New brand signings, rising co-brand share and sustained deposit growth expand origination channels and diversify merchant concentration. Strong partner relationships and product launches drive repeat volume, improve customer acquisition economics and make revenue sources more resilient over time.

Negative Factors

Volatile loan and revenue growth

Revenue and loan balances have shown wide year-to-year swings and management projects only low-single-digit growth. Elevated payment rates and uneven origination suggest future top-line growth may remain cyclical, constraining predictable earnings expansion and planning over the medium term.

Credit losses and reserves above targets

Although improving, net loss and reserve rates remain well above long-term targets. Persistent elevated credit costs require continued provisioning and capital support, limiting margin recovery and potentially reducing capital available for growth or returns until credit normalizes.

Net interest margin rate sensitivity

The firm’s asset-sensitive profile means NIM and NII can compress if the Fed eases and deposit betas are material. Because net interest margin is a primary earnings driver, structural rate-sensitivity introduces ongoing margin risk and uncertainty around sustainable profitability in a shifting rate environment.

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 origination, and funding services for approximately 130 private label and co-brand credit card programs, as well as through Bread partnerships to approximately 500 small-and medium-sized businesses merchants; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs and Bread BNPL (installment loans, split-pay) products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products, including installment and split-pay solutions. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was founded in 1996 and is headquartered in Columbus, Ohio.

How the Company Makes Money

Bread Financial generates revenue primarily through interest income from its credit products, including installment loans and private label credit cards. The company earns interest from customers who carry balances on their accounts, as well as from various fees associated with credit services, such as late payment fees and transaction fees. Additionally, BFH collaborates with numerous retail partners to offer branded credit solutions, which not only drive customer loyalty but also contribute to the company's revenue through merchant fees. Strategic partnerships with retailers and e-commerce platforms enhance their market reach and enable cross-selling opportunities, further solidifying their revenue streams.

Bread Financial Holdings Financial Statement Overview

Summary

Improving 2025 fundamentals with a strong revenue rebound and meaningfully better profitability, supported by robust operating and free cash flow. Key offsets are cyclicality/volatility across years and still-meaningful leverage for a credit-services model despite recent debt reduction.

Income Statement

Revenue has been volatile, with a decline in 2024 followed by a strong rebound in 2025 (annual revenue growth of ~38.5%). Profitability improved meaningfully in 2025 versus 2024 (net margin ~11.0% vs. ~5.8%), but remains below stronger years like 2021 and 2023, indicating earnings power is not yet consistently durable. Overall, the income profile is solid but cyclical, with margins and profits swinging year-to-year.

Balance Sheet

Leverage has improved: total debt fell from ~$5.7B (2024) to ~$4.3B (2025), and debt relative to equity decreased to ~1.29x from ~1.86x. Returns to shareholders strengthened in 2025 (return on equity ~15.6%), but balance-sheet risk remains meaningful for a credit-services business given the still-elevated debt load and historically higher leverage (above ~3.5x debt-to-equity in 2021–2022). Net: trending better, but not low-risk.

Cash Flow

Cash generation is a clear strength: operating cash flow increased to ~$2.09B in 2025 from ~$1.86B in 2024, and free cash flow also rose sharply (free cash flow growth ~4.86 in 2025). Free cash flow matches net income in the provided data (free cash flow to net income of 1.0), supporting earnings quality. The main weakness is volatility across years (e.g., free cash flow declined in 2024), which suggests cash flows can swing with credit conditions.

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

• Technical Analysis Sentiment: Negative
• Last Price: 71.56
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFH, the sentiment is Negative. The current price of 71.56 is below the 20-day moving average (MA) of 74.00, below the 50-day MA of 74.50, and above the 200-day MA of 63.29, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 42.74 is Neutral, neither overbought nor oversold. The STOCH value of 34.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BFH.

Bread Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BFH	73 Outperform	$3.21B	6.84	16.37%	1.12%	-4.32%	58.34%
SEZL	72 Outperform	$2.07B	18.80	107.03%	―	88.74%	106.14%
ENVA	71 Outperform	$3.45B	11.92	24.34%	―	21.10%	76.12%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WU	64 Neutral	$2.93B	6.04	51.86%	10.18%	-2.51%	17.47%
LC	61 Neutral	$1.73B	13.01	9.55%	―	9.68%	94.85%
LU	52 Neutral	$2.34B	-3.52	―	―	―	―

Bread Financial Holdings Corporate Events

Bread Financial Reports Stable Loans, Slightly Improved Credit Quality

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 $18.4 billion, while period‑end principal loans used for delinquency calculations were $16.4 billion, reflecting the structure of the portfolio and measurement approach.

Credit quality indicators showed modest improvement versus January 2025, with net principal losses declining to $111 million from $123 million and the net principal loss rate easing to 7.1% from 7.8%. Delinquency trends also improved, as 30‑days‑plus principal delinquencies fell to $960 million from $1.03 billion and the delinquency rate edged down to 5.9% from 6.1%, signaling slightly better credit performance for stakeholders monitoring asset quality in U.S. consumer credit.

The most recent analyst rating on (BFH) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Posts Strong 2025 Results, Raises Shareholder Returns

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 common stockholders, nearly doubled earnings per diluted share year over year, and lifted tangible book value per common share by 23% to $57.57, supported by higher net interest income, improved credit performance and lower credit-loss provisions. Management highlighted a resilient consumer backdrop, modest 3% growth in credit sales and stable partner relationships, with all top 10 programs renewed into at least 2028, while direct-to-consumer deposits rose 11% to $8.5 billion, now nearly half of total funding. The company also optimized its capital structure by retiring high-cost debt, issuing subordinated debt and preferred equity, and repurchasing $350 million of common stock in 2025, actions that contributed to credit rating upgrades and an improved outlook from major agencies. In conjunction with the earnings release, the board declared quarterly cash dividends payable on March 16, 2026 of $26.35 per share on its Series A preferred stock and $0.23 per share on common stock to shareholders of record on February 27, 2026, signaling continued commitment to shareholder returns while maintaining a common equity Tier 1 capital ratio of 13.0%.

The most recent analyst rating on (BFH) stock is a Sell with a $62.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Reports Slightly Improved Credit Quality Metrics

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% year over year. For the month and the fourth quarter, the company posted a net loss rate of 7.4%, with $116 million in net principal losses in December and $336 million for the quarter, while 30-plus-day delinquencies declined to $971 million and the delinquency rate edged down to 5.8% from 5.9% a year earlier, signaling slightly improved asset quality despite modestly lower loan balances.

The most recent analyst rating on (BFH) stock is a Sell with a $62.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Reports Improved November 2025 Performance

On December 10, 2025, Bread Financial Holdings reported a performance update for November 2025, highlighting a decrease in both net loss and delinquency rates compared to the previous year. The net loss rate decreased from 8.0% in November 2024 to 7.4% in November 2025, while the delinquency rate dropped from 6.2% to 6.0%, reflecting improved financial stability and operational resilience.

The most recent analyst rating on (BFH) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Holdings Issues New Preferred Stock Series

On November 25, 2025, Bread Financial Holdings, Inc. issued 3,000,000 depositary shares, each representing a 1/40th interest in its newly established 8.625% Non-Cumulative Perpetual Preferred Stock, Series A. This move, following an underwriting agreement with major financial institutions, aims to enhance the company’s financial structure by setting specific terms for dividends and stock transactions, potentially impacting its market position and shareholder value.

The most recent analyst rating on (BFH) stock is a Buy with a $98.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Announces Public Offering of Depositary Shares

On November 20, 2025, Bread Financial Holdings announced the pricing of an underwritten public offering of 3,000,000 depositary shares, each representing a 1/40th interest in a share of its 8.625% Non-Cumulative Perpetual Preferred Stock, Series A. The company expects to generate approximately $72.6 million in net proceeds from the offering, which will be used for general corporate purposes, potentially including contributions to its subsidiary, Comenity Capital Bank, and share repurchases. The offering is expected to close on November 25, 2025, subject to customary conditions, and the company plans to list the depositary shares on the New York Stock Exchange.

The most recent analyst rating on (BFH) stock is a Sell with a $52.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Launches Preferred Stock Offering

On November 20, 2025, Bread Financial Holdings announced the launch of a public offering of depositary shares, each representing a 1/40th interest in its Series A Preferred Stock. The company plans to use the proceeds for general corporate purposes, including potential contributions to its subsidiary, Comenity Capital Bank, and share repurchases. The offering is subject to market conditions, and the shares are expected to be listed on the New York Stock Exchange, with major financial institutions acting as joint bookrunners.

The most recent analyst rating on (BFH) stock is a Sell with a $52.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.