BFH Stock Forecast & Price Target

Bread Financial Holdings showcases a solid financial trajectory with a 1.8% sequential increase in deposit balances to $13.1 billion, indicating robust consumer direct business momentum and a strong foundation for funding needs. The company experienced a significant 22.2% sequential increase in credit sales, reaching $7.9 billion, alongside stable fundamentals and seasonal loan growth that supports positive quarterly trends. Management's revenue guidance suggests a low single-digit percentage increase from the previous year’s adjusted level of $3.827 billion, with expectations for higher loan balances driven by new business growth and expanding retail partnerships.

Bread Financial Holdings has experienced a decline in net interest income, decreasing by 4.7% sequentially and 8.1% year-over-year to $988 million, alongside a drop in margin by 100 basis points from the prior quarter. The company reported total revenues of $926 million, which fell by 5.8% sequentially and 8.9% compared to the previous year, indicating negative revenue trends exacerbated by competitive pressures. Additionally, the reserve as a percentage of loans, although modestly down to 11.9%, suggests potential credit quality concerns as management anticipates net charge-offs between 8.0% and 8.2%, reflecting ongoing economic headwinds.