BFH Stock Forecast & Price Target

The fundamental outlook for Bread Financial Holdings reflects a positive trajectory as evidenced by a 6.0% sequential increase in net interest income, highlighting effective financial management despite a slight year-over-year decline. The company is poised for growth, leveraging its partnerships with retailers and expanding its buy now, pay later (BNPL) initiatives, which could lead to accelerating revenue and receivables growth. Additionally, with a stable to improving credit trend and expectations of higher loan growth, Bread Financial is positioned to enhance its valuation over time if it maintains control over credit costs.

Bread Financial Holdings is facing a challenging financial outlook, as evidenced by a sequential decline in total revenues of 4.2% to $929 million and a decrease in net interest income by 3.2% to $974 million. Furthermore, the company's CET1 ratio fell to 13.0%, down from 13.8% a year prior, while management forecasts significant losses of 7.4% to 7.5% for the upcoming third quarter. Additionally, noninterest income remains in a negative position at -$45 million, worsening from -$36 million in the previous quarter, indicating ongoing difficulty in generating profit from ancillary services.