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Bread Financial Holdings
(NYSE:BFH)
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Rating:74Outperform
Price Target:
$122.00
▲(12.93% Upside)
Action:Reiterated
Date:09/15/26
BFH scores well on valuation (low P/E) and improving operating/credit momentum reinforced by upgraded guidance and better credit metrics. The main constraint is financial-statement variability and softer recent free-cash-flow momentum, which prevents a higher, top-tier score despite supportive technical trends.
Positive Factors
Revenue and profitability recovery
The sharp recovery in revenue and profitability indicates stronger operating performance and improved earnings capacity. If growth and margins remain supported by expanding loan balances and credit sales, BFH can generate more internal capital to invest in technology, partnerships, and risk management.
Negative Factors
Earnings and cash-flow volatility
The recent earnings rebound has not yet established a consistently stable multi-year pattern, while declining free cash flow weakens the momentum of cash generation. Persistent variability could make capital planning less predictable and reduce flexibility to fund growth, repayments, or shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and profitability recovery
The sharp recovery in revenue and profitability indicates stronger operating performance and improved earnings capacity. If growth and margins remain supported by expanding loan balances and credit sales, BFH can generate more internal capital to invest in technology, partnerships, and risk management.
Read all positive factors
Bread Financial Holdings Key Performance Indicators (KPIs)
Bread Financial Holdings (BFH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.86B
Dividend Yield0.91%
Average Volume (3M)558.44K
Price to Earnings (P/E)7.8
Beta (1Y)1.42
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. Volume511,369
30 Day Avg. Volume558,440
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 Cap1.02
Enterprise Value/Revenue0.83
Enterprise Value/Gross Profit1.29
Enterprise Value/Ebitda5.19
Forecast
1Y Price Target
$117.36Price Target Upside8.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)12.28
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 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 | 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
Positive
108.03
Price Trends
105.80
Negative
101.98
Negative
89.41
Positive
Market Momentum
-2.01
Positive
45.64
Neutral
63.98
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 108.03 is above the 20-day moving average (MA) of 102.28, above the 50-day MA of 105.80, and above the 200-day MA of 89.41, indicating a neutral trend. The MACD of -2.01 indicates Positive momentum. The RSI at 45.64 is Neutral, neither overbought nor oversold. The STOCH value of 63.98 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 | $3.86B | 7.78 | 17.04% | 0.91% | 0.85% | 117.85% | |
73 Outperform | $23.69B | 7.40 | 20.94% | 1.70% | -2.40% | 18.50% | |
69 Neutral | $122.24B | 12.33 | 9.28% | 1.61% | 37.99% | 722.44% | |
68 Neutral | $27.23B | 14.06 | 47.91% | ― | 32.43% | 3583.15% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $6.45B | 8.43 | 23.07% | 7.49% | 6.93% | 19.96% | |
61 Neutral | $1.42B | 9.71 | 23.09% | 16.39% | 83.72% | 35.89% |
* Financial Sector Average
BFH
Bread Financial Holdings
100.58
44.79
80.30%
COF
Capital One Financial
199.26
-5.17
-2.53%
SYF
Synchrony Financial
72.80
3.81
5.52%
ATLC
Atlanticus Holdings
93.73
37.46
66.57%
OMF
OneMain Holdings
56.07
6.48
13.07%
AFRM
Affirm Holdings
80.70
7.52
10.28%
Bread Financial Holdings Corporate Events
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...
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...
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.