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Bread Financial Holdings
(NYSE:BFH)
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Rating:74Outperform
Price Target:
$122.00
â–²(12.93% Upside)
Action:Reiterated
Date:10/22/26
BFH scores well due to improving profitability and a notably better leverage profile, reinforced by a strongly positive earnings call highlighting better credit metrics and raised/tightened guidance. Technicals also support the score with a clear uptrend, though overbought signals add near-term risk. Valuation is a positive contributor given the low P/E, while the modest dividend yield and recent free-cash-flow decline keep the score out of the top tier.
Positive Factors
Improving Credit Quality
Improving delinquency and net loss rates indicate that underwriting, product mix and newer-account seasoning are strengthening portfolio performance. Better credit quality can reduce provisions and support more predictable earnings as the loan book grows, while management’s sub-7% loss guidance reinforces the trend.
Negative Factors
Net Interest Margin Pressure
Expected margin pressure could limit earnings growth even if loan balances continue expanding. Lower-APR co-brand, proprietary-card and installment products, fewer billed late fees, and rising deposit costs may reduce the profitability of incremental receivables and make future improvement more dependent on operating efficiency.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving Credit Quality
Improving delinquency and net loss rates indicate that underwriting, product mix and newer-account seasoning are strengthening portfolio performance. Better credit quality can reduce provisions and support more predictable earnings as the loan book grows, while management’s sub-7% loss guidance reinforces the trend.
Read all positive factors
Bread Financial Holdings Key Performance Indicators (KPIs)
Any
Efficiency Ratio
Compares operating expenses with revenue, showing how effectively Bread Financial controls costs. A lower ratio generally signals stronger operating efficiency and profit potential.
Compares operating expenses with revenue, showing how effectively Bread Financial controls costs. A lower ratio generally signals stronger operating efficiency and profit potential.
Data provided by:
The Fly
The FlyBread Financial Holdings (BFH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.84B
Dividend Yield0.92%
Average Volume (3M)624.69K
Price to Earnings (P/E)7.7
Beta (1Y)1.40
Revenue Growth2.42%
EPS Growth29.18%
CountryUS
Employees6,000
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)13.01
Shares Outstanding38,419,270
10 Day Avg. Volume616,523
30 Day Avg. Volume624,687
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 Cap0.79
Enterprise Value/Revenue0.63
Enterprise Value/Gross Profit0.99
Enterprise Value/Ebitda3.98
Forecast
1Y Price Target
$119.18Price Target Upside10.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)12.94
Revenue Forecast (FY)$4.02B
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 extending consumer credit and earning returns and fees tied to that activity. A significant portion of revenue is generated from finance charges and interest income on credit card and other loan receivables...
Bread Financial Holdings Earnings Call Summary
Earnings Call Date:Oct 22, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jan 28, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall. Management reported solid loan, revenue and credit-sales growth; improving delinquency and net loss rates; raised full-year loan growth and credit guidance; strong deposit and liquidity metrics; partner renewals; and progress on the bank merger and credit rating. The principal challenges were lower net income due to a prior-year tax benefit, negative noninterest income, declining billed late fees, expected near-term NIM pressure, higher expenses and macroeconomic uncertainty. The positive operational and credit trends significantly outweighed the disclosed challenges.Positive Updates
Strong Third-Quarter Loan, Revenue and Credit Sales Growth
End-of-period loans grew 7% year-over-year to $18.9 billion, average loans increased 6% to $18.6 billion, revenue increased 5% or $46 million, and credit sales grew 9% year-over-year. Loan growth benefited from new partnerships, strong credit sales, increased general-purpose spending and a lower gross loss rate.
Negative Updates
Year-Over-Year Net Income Decline
Third-quarter net income declined $32 million, or 17%, year-over-year to $156 million. Management said the comparison was affected by a $38 million favorable discrete tax item included in the prior-year period.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Third-Quarter Loan, Revenue and Credit Sales Growth
End-of-period loans grew 7% year-over-year to $18.9 billion, average loans increased 6% to $18.6 billion, revenue increased 5% or $46 million, and credit sales grew 9% year-over-year. Loan growth benefited from new partnerships, strong credit sales, increased general-purpose spending and a lower gross loss rate.
Read all positive updates
Company Guidance
For full year 2026, Bread Financial expects average loan growth up approximately 4% year-over-year, total revenue growth up approximately 5%, full year net interest margin to be slightly higher than 2025, positive operating leverage excluding the pretax impact from debt repurchases, a full year net loss rate below 7.0% with an expected range of between 6.9% and 7.0% compared to prior guidance of 7.0% to 7.1%, and a normalized effective tax rate in the range of 25% to 27%; fourth quarter net interchange revenue as a percent of credit sales is expected to be consistent with third quarter results, net interest margin is expected to compress modestly on a sequential basis, expenses are anticipated to be higher sequentially, net loss rate is expected to be below 7%, and minimal repurchase activity is expected absent a preferred stock offering, while any additional preferred issuance will be opportunistic and remain subject to market conditions. Looking ahead, the loss rate is expected to be lower into next year but probably will not improve at the same degree of basis points as observed this year, growth will probably be stable to what was seen this year, and next year net interest margin is expected to be flat to slightly down; the company targets a CET1 ratio of about 12% to 13%, expects consumer deposits to reach 60% to 70% of total funding over a number of years, and remains committed to mid-20s ROTCEs.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 | 758.00M | 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 | 2.19B | 2.09B | 1.86B | 1.99B | 1.78B | 1.46B |
| Operating Cash Flow | 2.19B | 2.09B | 1.86B | 1.99B | 1.85B | 1.54B |
| Investing Cash Flow | -2.20B | -1.37B | -1.17B | 788.00M | -5.11B | -1.69B |
| Financing Cash Flow | -56.00M | -807.00M | -592.00M | -3.09B | 3.27B | 608.00M |
Bread Financial Holdings Technical Analysis
Negative
108.03
Price Trends
104.33
Negative
103.45
Negative
90.73
Positive
Market Momentum
-0.17
Negative
45.21
Neutral
53.06
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 108.03 is above the 20-day moving average (MA) of 100.73, above the 50-day MA of 104.33, and above the 200-day MA of 90.73, indicating a neutral trend. The MACD of -0.17 indicates Negative momentum. The RSI at 45.21 is Neutral, neither overbought nor oversold. The STOCH value of 53.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 | $3.84B | 7.75 | 15.94% | 0.92% | 2.42% | 29.18% | |
71 Outperform | $123.52B | 11.88 | 9.67% | 1.59% | 26.27% | 613.24% | |
68 Neutral | $23.65B | 12.27 | 47.91% | ― | 32.43% | 3583.15% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $22.93B | 7.61 | 19.99% | 1.68% | -1.80% | 4.62% | |
67 Neutral | $6.41B | 8.37 | 23.07% | 7.54% | 6.93% | 19.96% | |
61 Neutral | $1.31B | 8.98 | 23.09% | 16.39% | 83.72% | 35.89% |
* Financial Sector Average
BFH
Bread Financial Holdings
99.89
34.38
52.47%
COF
Capital One Financial
201.34
-18.73
-8.51%
SYF
Synchrony Financial
73.64
-0.09
-0.12%
ATLC
Atlanticus Holdings
86.19
27.37
46.53%
OMF
OneMain Holdings
55.72
1.50
2.77%
AFRM
Affirm Holdings
70.08
-6.37
-8.33%
Bread Financial Holdings Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Bread Financial Reports Strong Q3 Results, Raises Dividend
Positive
Oct 22, 2026
On October 22, 2026, Bread Financial reported third-quarter 2026 results showing 5% year-over-year revenue growth, net income of $156 million and a 7% rise in pretax income, driven by a 6% increase in average loans and disciplined expense manageme...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports Loan Growth and Improved Delinquencies
Neutral
Oct 22, 2026
On October 22, 2026, Bread Financial provided a performance update for the period ended September 30, 2026, showing end-of-period credit card and other loans of $18.85 billion and average loans of $18.74 billion for September, with a 6.4% year-ove...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports Strong August Loan and Credit Trends
Positive
Sep 15, 2026
On September 15, 2026, Bread Financial released performance figures for the month ended August 31, 2026, showing continued expansion of its loan portfolio and improving credit metrics. End‑of‑period credit card and other loans rose to ...
Business Operations and StrategyM&A TransactionsPrivate Placements and FinancingRegulatory Filings and Compliance
Bread Financial amends credit facility for bank merger
Neutral
Sep 8, 2026
On December 17, 2025, Bread Financial Holdings applied to merge Comenity Bank into Comenity Capital Bank, received all necessary regulatory approvals on July 31, 2026, and expects to complete the merger around October 1, 2026, with no significant ...
Business Operations and StrategyFinancial Disclosures
Bread Financial Reports Loan Growth and Improved Credit Metrics
Positive
Aug 17, 2026
On August 17, 2026, Bread Financial reported a July 2026 performance update showing end-of-period credit card and other loans of $18.54 billion, with average loans up 4.9% year over year to $18.45 billion, compared with July 2025. Net principal lo...
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...
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.