Bread Financial Holdings (BFH – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Mihir Bhatia from Bank of America Securities reiterated a Hold rating on the stock and has a $40.00 price target.
Mihir Bhatia has given his Hold rating due to a combination of factors impacting Bread Financial Holdings. Despite the positive tone from the company’s executives and their confidence in meeting short-term targets, Bhatia notes the challenges posed by regulatory changes, particularly from the Consumer Financial Protection Bureau (CFPB), as well as the pressures of high inflation and a softer macroeconomic environment on credit. Bread Financial’s proactive measures to mitigate the effects of potential lower late fees by increasing APRs on new loans are seen as prudent by Bhatia, although he recognizes that it will take time for these measures to fully offset the anticipated impact of new regulations.
Furthermore, the report indicates an expected sharp increase in credit losses in the near term, with the company forecasting mid-to-high 8% loss rates in the first and second quarters. However, Bread Financial is encouraged by signs of improvement in early-stage delinquency formations and expects macroeconomic factors and lower interest rates to provide support in the second half of the year. Despite these challenges, the company remains confident in its ability to reduce losses below 6% in the longer term. The adjustment of earnings per share (EPS) estimates for the coming years and the maintenance of a $40 price objective reflect the balance of these factors in Bhatia’s Hold rating.
In another report released yesterday, KBW also maintained a Hold rating on the stock with a $34.00 price target.
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Bread Financial Holdings (BFH) Company Description:
Alliance Data Systems Corp. engages in the provision of data-driven and transaction-based marketing and customer loyalty solutions. It operates through the following segments: LoyaltyOne, Epsilon and Card Services. The LoyaltyOne segment provides coalition and short-term loyalty programs. The Epsilon segment offers end-to-end, integrated marketing solutions. The Card Services offers risk management solutions, account origination, funding, transaction processing, customer care, collections, and marketing services for the company’s private label and co-brand credit card programs. The company was founded in 1996 and is headquartered in Columbus, Ohio.
Read More on BFH:
- Bread Financial Announces $30 Million Stock Buyback Program
- Bread Financial™ Announces Approval of $30 Million Share Repurchase Program
- Bread Financial Holdings Inc’s New Regulation Risk – A Cause for Worry?
- Bread Financial reports January net loss rate 8% vs. 6.7% last year
- Bread Financial Provides Performance Update for January 2024
