Bread Financial Q4 EPS Surpasses Estimates, Analysts Lift Price Targets to $64–$68
Bread Financial posted adjusted Q4 earnings of $2.07 per share on sales of $975 million, surpassing consensus estimates of $955.8 million. Barclays and Morgan Stanley maintained Underweight ratings but raised price targets to $64 and $68 respectively after the results.
1. Q4 2025 Earnings Exceed Expectations
Bread Financial Holdings reported adjusted earnings of $2.07 per share for the fourth quarter, comfortably surpassing the consensus estimate of $0.40 per share from Zacks Investment Research. Quarterly revenue reached $975 million, outpacing Wall Street’s forecast of $955.8 million. The results reflect a year-over-year EPS increase of more than 400%, compared with $0.41 per share in Q4 2024, and a 6.5% rise in revenue versus the $915 million posted in the year-ago quarter. Management attributed the strong performance to disciplined credit underwriting and growth in co-brand card partnerships in travel, health and specialty retail segments.
2. Analyst Price Target Revisions
Following the earnings release, Barclays analyst Terry Ma maintained an Underweight rating on BFH but raised his 12-month price target from $61 to $64, citing improved loss trends and stable funding costs. Morgan Stanley’s Jeffrey Adelson also kept an Underweight rating while lifting his target from $62 to $68, highlighting the company’s successful cost-reduction initiatives and evidence of incremental margin expansion in its pay-over-time portfolio. Both firms noted that while card loan growth remains muted, the trajectory of principal loss ratios supports a narrower multiple relative to peers.
3. Credit Portfolio Performance and Asset Quality
As of December 31, 2025, Bread Financial’s end-of-period credit card and other loan balances stood at $18.8 billion, with average balances of $18.47 billion for the month and $17.96 billion for the quarter, each down approximately 1% year-over-year. Net principal losses for the month were $116 million and $336 million for the quarter, yielding a net loss rate of 7.4% across both periods. The 30-plus-day delinquency rate improved to 5.8% from 5.9% a year earlier, driven by targeted collections efforts and tightened credit criteria for higher-risk segments.
4. Q1 2026 Dividend Declaration
Bread Financial’s board declared a quarterly common stock dividend of $0.23 per share, payable March 16, 2026, to shareholders of record on March 2. Additionally, the 8.625% Non-Cumulative Perpetual Preferred Stock, Series A, dividend of $26.35 per share was approved for the same payable and record dates. The dividend announcement underscores the company’s commitment to returning capital as core earnings and asset quality metrics continue to strengthen.