Yahoo Finance Here's Why Hold Strategy is Apt for Bread Financial (BFH)
Bread Financial Holdings, Inc. BFH has been in investors’ good books because of growing retained earnings, active risk management, solid consumer spending and capital deployment.
Growth Projections
The Zacks Consensus Estimate for BFH’s 2023 earnings is pegged at $11.55, indicating a 158.3% increase from the year-ago reported figure, driven by 12.3% higher revenues of $4.30 billion.
Zacks Rank
Bread Financial currently carries a Zacks Rank #3 (Hold).
Business Tailwinds
The credit sales performance is expected to improve on the back of solid consumer spending. With the continued growth of credit sales, average loans are likely to increase. With new partner additions and holiday spending, BFH continues to expect strong credit sales.
Credit metrics should remain strong with delinquency and net loss rates remaining below the historical averages. Given disciplined, proactive risk management and strong consumer payment behavior, net loss rates are expected to remain low.
The company should continue to invest in its digital platform, product innovation, marketing efforts and technology modernization. BFH intends to make incremental strategic investments of more than $125 million in technology modernization, digital advancement, marketing and product innovation to fuel growth opportunities and future operating efficiencies.
Capital ratios are likely to improve on the back of a rise in retained earnings, thus providing flexibility to continue to support profitable growth.
Bread Financial boasts a strong balance sheet by virtue of its solid cash position and has sufficient cash reserves to meet debt obligations.
Bread Financial remains focused on returning value to its shareholders. It uses share repurchases as a tool to mitigate the adverse impact of foreign exchange and intends to focus more on share buybacks and mergers and acquisitions.
Price Performance
In the past year, the stock has decreased 10.8% against the industry’s increase of 13%. Strong fundamentals of Bread Financial are likely to help the stock bounce back.
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Stocks to Consider
Some better-ranked financial transaction service providers are Paysafe Limited PSFE, Visa Inc. V and Marqeta, Inc. MQ. While Paysafe sports a Zacks Rank #1 (Strong Buy), Visa and Marqeta carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Paysafe’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 190.54%. In the past year, PSFE has lost 44.7%.
The Zacks Consensus Estimate for PSFE’s 2023 and 2024 earnings has moved 243.7% and 58.6% north, respectively, in the past 60 days.
Visa has a decent track record of beating earnings estimates in each of the last four reported quarters, the average beat being 8.03%. In the past year, V has gained 17.7%.
The Zacks Consensus Estimate for V’s 2023 and 2024 earnings indicates a respective year-over-year increase of 14.5% and 12.7%.
Marqeta has a decent track record of beating earnings estimates in three of the last four quarters, while missing in one, the average being 11.82%. In the past year, MQ has lost 32.9%.
The Zacks Consensus Estimate for MQ’s 2023 and 2024 revenues indicates a respective year-over-year increase of 21.8% and 16.9%.
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Visa Inc. (V) : Free Stock Analysis Report
Paysafe Limited (PSFE) : Free Stock Analysis Report
Marqeta, Inc. (MQ) : Free Stock Analysis Report
Bread Financial Holdings, Inc. (BFH) : Free Stock Analysis Report
