Wall Street Zen Upgrades Bread Financial (NYSE:BFH) to Buy

Key Points

• Wall Street Zen upgraded Bread Financial from “hold” to “buy,” adding to a broadly positive analyst backdrop. Across the analyst community, BFH now carries a Moderate Buy rating with an average price target of $96.42.
• Bread Financial posted strong quarterly results, earning $4.18 per share versus the $3.00 consensus estimate and generating $1.02 billion in revenue, which also topped expectations. Revenue rose 4.9% year over year, and analysts expect full-year EPS of 10.65.
• The company’s board authorized a $600 million stock repurchase plan, allowing it to buy back up to 19% of outstanding shares. That move signals management may view the stock as undervalued, even as the CEO recently sold shares and a director bought a smaller stake.

Bread Financial (NYSE:BFH - Get Free Report) was upgraded by analysts at Wall Street Zen from a "hold" rating to a "buy" rating in a note issued to investors on Saturday.

A number of other equities research analysts also recently commented on the stock. Royal Bank Of Canada raised their price objective on shares of Bread Financial from $105.00 to $115.00 and gave the company a "sector perform" rating in a research report on Friday. Bank of America reissued a "buy" rating and set a $108.00 price objective on shares of Bread Financial in a report on Wednesday. Keefe, Bruyette & Woods reissued an "outperform" rating on shares of Bread Financial in a report on Wednesday. Evercore reissued an "outperform" rating and set a $99.00 price objective on shares of Bread Financial in a report on Wednesday, April 29th. Finally, Morgan Stanley set a $98.00 price objective on shares of Bread Financial in a report on Friday, April 24th. One investment analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, four have given a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $96.42.

Bread Financial Price Performance

Shares of NYSE:BFH opened at $101.62 on Friday. The company has a quick ratio of 1.15, a current ratio of 1.15 and a debt-to-equity ratio of 0.25. The company has a market cap of $4.11 billion, a P/E ratio of 8.32, a PEG ratio of 0.88 and a beta of 1.12. Bread Financial has a 52 week low of $50.63 and a 52 week high of $103.12. The company has a 50-day moving average price of $86.76 and a 200 day moving average price of $78.13.

Bread Financial (NYSE:BFH - Get Free Report) last announced its quarterly earnings data on Thursday, April 23rd. The company reported $4.18 EPS for the quarter, beating analysts' consensus estimates of $3.00 by $1.18. The firm had revenue of $1.02 billion during the quarter, compared to the consensus estimate of $992.05 million. Bread Financial had a net margin of 11.90% and a return on equity of 18.79%. The firm's revenue was up 4.9% compared to the same quarter last year. During the same quarter last year, the firm earned $2.86 earnings per share. Research analysts predict that Bread Financial will post 10.65 earnings per share for the current year.

Bread Financial announced that its Board of Directors has initiated a stock repurchase plan on Thursday, February 26th that allows the company to repurchase $600.00 million in outstanding shares. This repurchase authorization allows the company to buy up to 19% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling at Bread Financial

In other Bread Financial news, CEO Ralph J. Andretta sold 15,000 shares of the company's stock in a transaction dated Friday, May 29th. The shares were sold at an average price of $89.10, for a total value of $1,336,500.00. Following the sale, the chief executive officer owned 582,241 shares of the company's stock, valued at $51,877,673.10. This represents a 2.51% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director John J. Fawcett acquired 698 shares of the company's stock in a transaction that occurred on Thursday, May 21st. The shares were bought at an average price of $86.43 per share, with a total value of $60,328.14. Following the transaction, the director owned 11,000 shares in the company, valued at $950,730. This represents a 6.78% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders own 1.30% of the company's stock.

Institutional Trading of Bread Financial

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Kemnay Advisory Services Inc. acquired a new position in Bread Financial during the fourth quarter worth approximately $28,000. Cullen Frost Bankers Inc. acquired a new position in Bread Financial during the fourth quarter worth approximately $29,000. Northwestern Mutual Wealth Management Co. increased its position in Bread Financial by 141.2% during the third quarter. Northwestern Mutual Wealth Management Co. now owns 562 shares of the company's stock worth $31,000 after purchasing an additional 329 shares during the last quarter. EverSource Wealth Advisors LLC increased its position in Bread Financial by 127.2% during the second quarter. EverSource Wealth Advisors LLC now owns 711 shares of the company's stock worth $41,000 after purchasing an additional 398 shares during the last quarter. Finally, First Horizon Corp acquired a new position in Bread Financial during the fourth quarter worth approximately $56,000. Hedge funds and other institutional investors own 99.52% of the company's stock.

About Bread Financial

Bread Financial, formerly known as Alliance Data Systems, is a Columbus, Ohio–based financial services company that specializes in providing private label credit programs, co-brand credit cards and digital payment solutions for retail partners. The company designs, issues and services proprietary credit products, enabling merchants to offer branded financing options that drive customer loyalty and increase basket sizes at the point of sale. Through its Bread technology platform, Bread Financial delivers installment-based payment options that integrate directly into e-commerce and in-store checkout experiences.

In addition to its core credit offerings, Bread Financial provides analytics, marketing and loyalty services to help merchants better understand consumer behavior and optimize promotional strategies.

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