BFH Stock Forecast & Price Target

Bread Financial Holdings has demonstrated a positive financial trajectory, marked by a sequential increase of 6.0% in net interest income, reflecting robust operational performance amidst challenging economic conditions. The company is poised for growth as it seeks to attract additional retail partners and expand its Buy Now Pay Later (BNPL) initiatives, which are expected to accelerate revenue and receivables growth. Furthermore, with stable to improving credit trends and expectations for higher loan volumes in 2026, Bread Financial is well-positioned to enhance its valuation over time if it effectively manages credit costs.

Bread Financial Holdings has demonstrated concerning financial trends, evidenced by a decline in total revenues by 4.2% sequentially and 1.1% year-over-year, amounting to $929 million. Additionally, the company's net interest income dropped by 3.2% sequentially and 1.3% year-over-year to $974 million, accompanied by a declining net interest margin, which decreased by approximately 40 bps sequentially to 17.7%. Furthermore, management forecasts significant losses of 7.4% to 7.5% for the third quarter, indicating potential ongoing challenges for the company in the near term.