Shares of Bread Financial Holdings, Inc. BFH have rallied 71.5% in the past year, outperforming the Zacks Financial - Miscellaneous Services industry’s decline of 24.8%, and the Finance sector and the Zacks S&P 500 composite’s growth of 13.2% and 23.7%, respectively.

Shares of Bread Financial closed at $102.21 on Tuesday, near its 52-week high of $109.91. This proximity underscores investor confidence. It has the ingredients for further price appreciation.

The insurer has a market capitalization of $4.13 billion. The average volume of shares traded in the last three months was 0.6 million.

The stock has a solid track record of beating earnings estimates in each of the last four quarters, with an average of 154.27%.

BFH Trading Above 50-Day and 200-Day Moving Averages

The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $92.76 and $75.74, respectively, indicating solid upward momentum. The SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

BFH Shares Are Affordable

Bread Financial shares are trading at a discount compared with the industry. Its forward price-to-earnings multiple of 8.92X is lower than the industry average of 9.62X, the Finance sector’s 16.42X and the Zacks S&P 500 Composite’s 21.07X. The insurer has a Value Score of A.

Shares of Virtu Financial, Inc. VIRT, American Express Company AXP and Marex Group PLC MRX are trading at a multiple higher than the industry average.

BFH’s Encouraging Growth Projection

The Zacks Consensus Estimate for Bread Financial’s 2026 revenues is pegged at $3.94 billion, implying a year-over-year improvement of 2.5%.

The consensus estimate for 2027 earnings per share and revenues indicates an increase of 9.5% and 3.5%, respectively, from the corresponding 2026 estimates.

Optimist Analyst Sentiment on BFH

Two of the five analysts covering the stock have raised estimates for 2026, and two of the six analysts have raised estimates for 2027 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 2.1% and 0.2%, respectively, in the past 60 days.

Factors Acting in Favor of BFH

The credit sales performance is expected to improve on the back of solid consumer spending. With the continued growth in 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 across growth verticals, 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.

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, mergers and acquisitions.

End Notes

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 and attractive valuations should continue to benefit Bread Financial over the long term. The stock currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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Bread Financial Holdings, Inc. (BFH): Free Stock Analysis Report

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