Bread Financial reported adjusted earnings of $2.07 per share for the fourth quarter, surpassing consensus estimates by $0.23. Quarterly net revenue reached $975 million, an increase of 2.0% year-over-year, and exceeded the Street’s $955.8 million projection. Fee income grew 5% to $210 million, driven by higher co-brand card usage, while net interest income rose 1.5% to $620 million, reflecting stable lending spreads despite modestly higher funding costs.

Following the release, Barclays analyst Terry Ma reiterated an Underweight rating but raised the 12-month price target from $61 to $64, citing improved fee revenue visibility and disciplined credit underwriting. Morgan Stanley’s Jeffrey Adelson also maintained an Underweight view and lifted his target from $62 to $68, highlighting better-than-expected loss reserves and potential upside from planned cost synergies in the payments segment.

As of December 31, Bread Financial’s end-of-period credit card and other loans stood at $18.8 billion, flat sequentially and down 1% year-over-year. Net principal losses totaled $336 million for the quarter, translating to a 7.4% loss rate, unchanged from the prior quarter. The 30-plus-day delinquency rate improved to 5.8%, down from 5.9% a year earlier, reflecting stable consumer repayment trends despite elevated macroeconomic pressures.

The Board declared a quarterly common dividend of $0.23 per share, payable March 16, 2026, as well as a preferred dividend of $26.35 per share on its Series A perpetual preferred stock. The dividend commitments reflect a payout ratio near 6% of trailing-twelve-month adjusted net income, underscoring management’s confidence in cash flow generation and capital adequacy.