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Reasons Why Investors Should Retain Bread Financial (BFH)
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Bread Financial Holdings, Inc. (BFH - Free Report) is well-poised for growth, driven by higher retained earnings, active risk management, solid consumer spending and capital deployment.
Growth Projections
The Zacks Consensus Estimate for Bread Financial’s 2023 earnings is pegged at $12.92 per share, indicating a 189% increase from the year-ago reported figure, driven by 10.7% higher revenues of $4.24 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 have moved up nearly 1% and 5.9%, respectively, in the past 30 days, reflecting investors’ optimism.
Zacks Rank
Bread Financial currently carries a Zacks Rank #3 (Hold).
Earnings Surprise History
BFH surpassed earnings estimates in each of the last four quarters, the average being 126.32%.
Style Score
Bread Financial has a favorable VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and most promising momentum.
Business Tailwinds
The credit sales performance is expected to improve on the back of solid consumer spending. With the continued growth of credit sales, average loans are likely to increase. With new partner additions and holiday spending, BFH continues to expect strong credit sales.
Credit metrics should remain strong with delinquency and net loss rates remaining below the historical averages. Given disciplined, proactive risk management and strong consumer payment behavior, net loss rates are expected to remain low.
Capital ratios are likely to improve on the back of a rise in retained earnings, thus providing flexibility to continue to support profitable growth.
Bread Financial boasts a strong balance sheet by virtue of its solid cash position and has sufficient cash reserves to meet debt obligations.
BFH remains focused on returning value to its shareholders. It uses share repurchases as a tool to mitigate the adverse impact of foreign exchange and intends to focus more on share buybacks and mergers and acquisitions.
Key Concerns
Bread Financial has been witnessing a rise in non-interest expenses for the past few years, owing to higher compensation and benefit expense, information processing and communication expense as well as card and processing expenses. The company expects third-quarter net loss rate to trend upward to around 7%.
Nevertheless, the company expects total expenses in the second half of 2023 to be lower than the first half. Third-quarter expenses are expected to be lower than the second quarter due to improved operating efficiencies related to the company’s technology modernization efforts and lower intangible amortization expense.
Price Performance
In the past year, the stock has gained 1% compared with the industry’s growth of 14.5%. Strong fundamentals of Bread Financial are likely to help the stock bounce back.
Paysafe’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 153.96%. In the past year, PSFE has lost 38.4%.
The Zacks Consensus Estimate for PSFE’s 2023 and 2024 earnings indicates a respective year-over-year increase of 1.3% and 3.5%.
Shift4 Payments’ earnings surpassed estimates in each of the last four quarters, the average being 21.93%. In the past year, FOUR has gained 25.9%.
The Zacks Consensus Estimate for FOUR’s 2023 and 2024 earnings indicates a respective year-over-year increase of 93.5% and 25%.
FirstCash’s earnings surpassed estimates in each of the last four quarters, the average being 7.31%. In the past year, FCFS has gained 14%.
The Zacks Consensus Estimate for FCFS’ 2023 and 2024 earnings indicates a respective year-over-year increase of 6.3% and 21.8%.
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Reasons Why Investors Should Retain Bread Financial (BFH)
Bread Financial Holdings, Inc. (BFH - Free Report) is well-poised for growth, driven by higher retained earnings, active risk management, solid consumer spending and capital deployment.
Growth Projections
The Zacks Consensus Estimate for Bread Financial’s 2023 earnings is pegged at $12.92 per share, indicating a 189% increase from the year-ago reported figure, driven by 10.7% higher revenues of $4.24 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 have moved up nearly 1% and 5.9%, respectively, in the past 30 days, reflecting investors’ optimism.
Zacks Rank
Bread Financial currently carries a Zacks Rank #3 (Hold).
Earnings Surprise History
BFH surpassed earnings estimates in each of the last four quarters, the average being 126.32%.
Style Score
Bread Financial has a favorable VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and most promising momentum.
Business Tailwinds
The credit sales performance is expected to improve on the back of solid consumer spending. With the continued growth of credit sales, average loans are likely to increase. With new partner additions and holiday spending, BFH continues to expect strong credit sales.
Credit metrics should remain strong with delinquency and net loss rates remaining below the historical averages. Given disciplined, proactive risk management and strong consumer payment behavior, net loss rates are expected to remain low.
Capital ratios are likely to improve on the back of a rise in retained earnings, thus providing flexibility to continue to support profitable growth.
Bread Financial boasts a strong balance sheet by virtue of its solid cash position and has sufficient cash reserves to meet debt obligations.
BFH remains focused on returning value to its shareholders. It uses share repurchases as a tool to mitigate the adverse impact of foreign exchange and intends to focus more on share buybacks and mergers and acquisitions.
Key Concerns
Bread Financial has been witnessing a rise in non-interest expenses for the past few years, owing to higher compensation and benefit expense, information processing and communication expense as well as card and processing expenses. The company expects third-quarter net loss rate to trend upward to around 7%.
Nevertheless, the company expects total expenses in the second half of 2023 to be lower than the first half. Third-quarter expenses are expected to be lower than the second quarter due to improved operating efficiencies related to the company’s technology modernization efforts and lower intangible amortization expense.
Price Performance
In the past year, the stock has gained 1% compared with the industry’s growth of 14.5%. Strong fundamentals of Bread Financial are likely to help the stock bounce back.
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Stocks to Consider
Some better-ranked financial transaction service providers are Paysafe Limited (PSFE - Free Report) , Shift4 Payments, Inc. (FOUR - Free Report) and FirstCash Holdings, Inc. (FCFS - Free Report) . While PSFE and FOUR sport a Zacks Rank #1 (Strong Buy) each, FCFS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Paysafe’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 153.96%. In the past year, PSFE has lost 38.4%.
The Zacks Consensus Estimate for PSFE’s 2023 and 2024 earnings indicates a respective year-over-year increase of 1.3% and 3.5%.
Shift4 Payments’ earnings surpassed estimates in each of the last four quarters, the average being 21.93%. In the past year, FOUR has gained 25.9%.
The Zacks Consensus Estimate for FOUR’s 2023 and 2024 earnings indicates a respective year-over-year increase of 93.5% and 25%.
FirstCash’s earnings surpassed estimates in each of the last four quarters, the average being 7.31%. In the past year, FCFS has gained 14%.
The Zacks Consensus Estimate for FCFS’ 2023 and 2024 earnings indicates a respective year-over-year increase of 6.3% and 21.8%.