Bread Financial Holdings (BFH) AI Stock Analysis

• Market Cap: $3.31B
• Dividend Yield: 1.12%
• Average Volume (3M): 799.00K
• Price to Earnings (P/E): 6.7
• Beta (1Y): 1.27
• 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: 45,661,602
• 10 Day Avg. Volume: 803,711
• 30 Day Avg. Volume: 798,998
• PEG Ratio: -0.18
• Price to Book (P/B): 0.99
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 1.63
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 0.88
• Enterprise Value/Gross Profit: 1.65
• Enterprise Value/Ebitda: 6.65
• 1Y Price Target: $82.50
• Price Target Upside: 12.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 9.93
• Revenue Forecast (FY): $3.97B

• Rating: 72 Outperform
• Price Target: $81.00 ▲(10.88% Upside)

The score is driven primarily by strong cash-flow generation and improving profitability, supported by a low valuation multiple. Earnings-call guidance is constructive but tempered by rate sensitivity, fee pressure, and credit metrics that are improving yet still elevated. Technical signals are mixed-to-weak, limiting the overall score.

Positive Factors

Cash Generation

Consistently strong operating cash flow (~$2.0B TTM) and free cash flow that closely tracks operations provide durable financial flexibility. This supports investments, capital returns, debt paydowns and reserves, reducing reliance on external funding and strengthening long-term resilience.

Funding Mix & Liquidity

Sustained deposit growth (direct-to-consumer +11% YoY; 48% of funding) and substantial liquid assets reduce reliance on wholesale markets. A stickier, lower-cost funding base improves funding stability and margin durability, aiding capital planning and reducing refinancing risk over time.

Partner Signings & Product Diversification

New partner signings and product launches expand distribution and diversify revenue sources. Greater co-brand exposure and integrations (BreadPay, crypto.com) increase customer acquisition channels and cross-sell opportunities, strengthening the core private-label credit franchise over multiple years.

Negative Factors

Revenue & Fee Pressure

Declining revenue and structural pressure on billed fees (lower late fees as delinquencies improve) reduce noninterest income durability. With fee income under pressure, the company must rely more on interest income and efficiency gains to sustain long-term revenue growth and profitability.

NIM and Rate Sensitivity

The business is asset-sensitive and exposed to Fed rate moves; expected cuts could compress net interest margin if assets reprice faster than liabilities. Uncertain deposit beta (60%–80%) creates funding-cost risk that can materially affect sustainable net interest income and returns.

Elevated Losses & Sluggish Loan Growth

Although improving, net loss and reserve rates remain meaningfully above long-term targets while average loans are flat-to-down. Elevated credit costs and limited loan growth constrain capital generation and return-on-capital recovery, slowing progress toward mid‑20% ROTC targets.

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

Strong cash generation (TTM operating cash flow ~$2.0B with free cash flow closely tracking) and improved TTM profitability support the score. Offsetting this, revenue is down in TTM and 2024 with historically volatile margins, and the sharp swing to a no-debt TTM position versus prior leveraged years raises durability questions.

Income Statement

TTM (Trailing-Twelve-Months) profitability improved versus 2024, with net income rising to $472M (from $277M) and stronger operating profitability. However, revenue is down in both TTM (Trailing-Twelve-Months) and 2024, and margins have been volatile over the last several years (strong 2021/2023, weaker 2024/TTM), suggesting a less consistent earnings profile.

Balance Sheet

Leverage looks materially better in TTM (Trailing-Twelve-Months), showing no debt and a clean debt-to-equity reading, alongside a solid return on equity. That said, prior years carried meaningful leverage (debt-to-equity ~1.9x in 2023–2024 and higher in 2020–2022), so the year-to-year shift is large and balance-sheet risk depends on whether the TTM (Trailing-Twelve-Months) deleveraging is durable.

Cash Flow

Cash generation is a clear strength: operating cash flow is very strong in both TTM (Trailing-Twelve-Months) ($2.0B) and 2024 ($1.86B), with free cash flow closely tracking operating cash flow. Free cash flow has accelerated sharply in TTM (Trailing-Twelve-Months) after a modest decline in 2024, supporting financial flexibility, although some coverage metrics are inconsistent across periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.68B	4.80B	5.17B	4.37B	3.27B	3.30B
Gross Profit	2.51B	2.44B	3.07B	2.28B	2.06B	1.95B
EBITDA	623.00M	471.00M	1.08B	413.00M	1.17B	549.00M
Net Income	472.00M	277.00M	718.00M	223.00M	801.00M	214.00M
Balance Sheet
Total Assets	21.71B	22.89B	23.14B	25.41B	21.75B	22.55B
Cash, Cash Equivalents and Short-Term Investments	4.05B	3.85B	3.76B	3.99B	3.11B	3.02B
Total Debt	3.79B	5.68B	5.44B	8.13B	7.57B	8.70B
Total Liabilities	18.40B	19.84B	20.22B	23.14B	19.66B	21.03B
Stockholders Equity	3.32B	3.05B	2.92B	2.27B	2.09B	1.52B
Cash Flow
Free Cash Flow	2.00B	1.86B	1.99B	1.78B	1.46B	1.83B
Operating Cash Flow	2.00B	1.86B	1.99B	1.85B	1.54B	1.88B
Investing Cash Flow	-1.22B	-1.17B	788.00M	-5.11B	-1.69B	1.77B
Financing Cash Flow	-476.00M	-592.00M	-3.09B	3.27B	608.00M	-4.17B

Bread Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 73.05
• 50DMA: Positive
• 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 Positive. The current price of 73.05 is above the 20-day moving average (MA) of 72.99, above the 50-day MA of 72.52, and above the 200-day MA of 61.33, indicating a bullish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 51.86 is Neutral, neither overbought nor oversold. The STOCH value of 77.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BFH.

Bread Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENVA	73 Outperform	$4.08B	14.88	24.34%	―	21.10%	76.12%
BFH	72 Outperform	$3.31B	6.66	16.37%	1.12%	-4.32%	58.34%
SEZL	72 Outperform	$2.16B	19.77	107.03%	―	88.74%	106.14%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WU	67 Neutral	$2.98B	4.07	97.70%	10.18%	-2.51%	17.47%
LC	63 Neutral	$1.95B	14.60	9.55%	―	9.68%	94.85%
LU	52 Neutral	$2.34B	-3.41	―	―	―	―

Bread Financial Holdings Corporate Events

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.

Bread Financial Reports Improved Financial Metrics Update

On November 13, 2025, Bread Financial Holdings, Inc. released a performance update for the period ending October 31, 2025. The update highlighted a slight decrease in the net loss rate and delinquency rate compared to the previous year, with the net principal losses and average credit card loans also showing a year-over-year decline. The company attributed the lower net loss rate in the fourth quarter of 2024 to a temporary freeze on delinquency progression due to hurricanes Helene and Milton.

The most recent analyst rating on (BFH) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Holdings Completes $500 Million Senior Notes Offering

On November 6, 2025, Bread Financial Holdings, Inc. completed its offering of $500 million in 6.750% Senior Notes due 2031, which are senior unsecured obligations. This financial move is significant as it strengthens the company’s capital structure and provides flexibility for future operations, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (BFH) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.