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Bread Financial Stock Near 52-Week High: What Should Investors Do?
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Key Takeaways
BFH expects credit sales growth from strong consumer spending, new partners, and holiday demand.
Average loans are set to rise, alongside higher credit sales.
Strategic investments in digital innovation, technology, and marketing aim to drive growth.
Bread Financial Holdings, Inc. (BFH - Free Report) closed at $66.19 on Friday, near its 52-week high of $67.33. This proximity underscores investor confidence. It has the ingredients for further price appreciation.
The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $60.42 and $56.49, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
Shares of BFH have rallied 8.4% year to date, outperforming the industry’s growth of 5.4%.
The stock has a solid track record of beating earnings estimates in three of the past four quarters and missing in one, with an average surprise of 32.01%.
Image Source: Zacks Investment Research
BFH Shares are Affordable
BFH shares are trading at a discount to the Zacks Financial Miscellaneous Services industry. Its forward price-to-earnings of 7.71X is lower than the industry average of 24.8X, the Finance sector’s 17.32X and the Zacks S&P 500 Composite’s 22.8X. It has a Value Score of A. Shares of Virtu Financial, Inc. (VIRT - Free Report) , American Express Company (AXP - Free Report) and LendingClub Corporation (LC - Free Report) are also trading at a discount to the industry average.
Image Source: Zacks Investment Research
BFH’s Encouraging Growth Projection
The Zacks Consensus Estimate for Bread Financial’s 2025 earnings per share indicates a year-over-year increase of 9.8%. The consensus estimate for revenues is pegged at $3.88 billion, implying a year-over-year improvement of 1.1%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 4.2% and 3.5%, respectively, from the corresponding 2025 estimates.
Optimist Analyst Sentiment on BFH
Two of the three analysts covering the stock have raised estimates for 2025, and one of the seven analysts has raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 4.3% and 0.2%, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Average Target Price for BFH Suggests Upside
Based on short-term price targets offered by 14 analysts, the Zacks average price target is $70.14 per share. The average suggests a potential 5.9% upside from the last closing price.
Image Source: Zacks Investment Research
BFH’s Return on Capital
The return on invested capital in the trailing 12 months was 9.7%, better than the industry average of 5.1%, reflecting the company’s efficiency in utilizing funds to generate income.
Factors Acting in Favor of BFH
The credit sales performance is expected to improve due to 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.
BFH is prudently investing in strategic growth areas and ramping up marketing spending in growth verticals and digital innovation and technology enhancements. Bread Financial stated that ramping up its digital and technology capabilities remains a top priority this year. It has strategic relationships leveraging BFH’s versatile mono platform, including RBC, Fiserv and Sezzle.
The company has been strengthening its balance sheet and lowering debt. Notably, its free cash flow conversion has been impressive over the last several quarters, reflecting its solid earnings. Bread Financial also intends to pay down $100 million remaining in 2026 bonds by this year to further improve leverage.
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.
What to Do With BFH Stock?
Robust credit sales, higher retained earnings, active risk management, solid consumer spending and capital deployment should continue to favor Bread Financial over the long term.
BFH also has a VGM Score of A. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Higher return on capital, favorable growth estimates, as well as attractive valuations should continue to benefit Bread Financial over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Bread Financial Stock Near 52-Week High: What Should Investors Do?
Key Takeaways
Bread Financial Holdings, Inc. (BFH - Free Report) closed at $66.19 on Friday, near its 52-week high of $67.33. This proximity underscores investor confidence. It has the ingredients for further price appreciation.
The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $60.42 and $56.49, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
Shares of BFH have rallied 8.4% year to date, outperforming the industry’s growth of 5.4%.
The stock has a solid track record of beating earnings estimates in three of the past four quarters and missing in one, with an average surprise of 32.01%.
Image Source: Zacks Investment Research
BFH Shares are Affordable
BFH shares are trading at a discount to the Zacks Financial Miscellaneous Services industry. Its forward price-to-earnings of 7.71X is lower than the industry average of 24.8X, the Finance sector’s 17.32X and the Zacks S&P 500 Composite’s 22.8X. It has a Value Score of A.
Shares of Virtu Financial, Inc. (VIRT - Free Report) , American Express Company (AXP - Free Report) and LendingClub Corporation (LC - Free Report) are also trading at a discount to the industry average.
Image Source: Zacks Investment Research
BFH’s Encouraging Growth Projection
The Zacks Consensus Estimate for Bread Financial’s 2025 earnings per share indicates a year-over-year increase of 9.8%. The consensus estimate for revenues is pegged at $3.88 billion, implying a year-over-year improvement of 1.1%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 4.2% and 3.5%, respectively, from the corresponding 2025 estimates.
Optimist Analyst Sentiment on BFH
Two of the three analysts covering the stock have raised estimates for 2025, and one of the seven analysts has raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 4.3% and 0.2%, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Average Target Price for BFH Suggests Upside
Based on short-term price targets offered by 14 analysts, the Zacks average price target is $70.14 per share. The average suggests a potential 5.9% upside from the last closing price.
Image Source: Zacks Investment Research
BFH’s Return on Capital
The return on invested capital in the trailing 12 months was 9.7%, better than the industry average of 5.1%, reflecting the company’s efficiency in utilizing funds to generate income.
Factors Acting in Favor of BFH
The credit sales performance is expected to improve due to 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.
BFH is prudently investing in strategic growth areas and ramping up marketing spending in growth verticals and digital innovation and technology enhancements. Bread Financial stated that ramping up its digital and technology capabilities remains a top priority this year. It has strategic relationships leveraging BFH’s versatile mono platform, including RBC, Fiserv and Sezzle.
The company has been strengthening its balance sheet and lowering debt. Notably, its free cash flow conversion has been impressive over the last several quarters, reflecting its solid earnings. Bread Financial also intends to pay down $100 million remaining in 2026 bonds by this year to further improve leverage.
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.
What to Do With BFH Stock?
Robust credit sales, higher retained earnings, active risk management, solid consumer spending and capital deployment should continue to favor Bread Financial over the long term.
BFH also has a VGM Score of A. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Higher return on capital, favorable growth estimates, as well as attractive valuations should continue to benefit Bread Financial over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.