Bread Financial Holdings Inc. advanced 2.8% to $108.14 in midday trading Tuesday after Wolfe Research upgraded the consumer finance company to Outperform from Peerperform.
The upgrade follows second-quarter results that exceeded expectations, with diluted earnings of $3.55 per share versus a $2.70 consensus estimate. Revenue totaled $993 million, also topping forecasts. Wolfe Research cited a constructive outlook for credit quality, reduced late-fee exposure, potential earnings estimate revisions, accelerating loan growth and controlled expense expansion as drivers for the rating change.
The firm set a $130 price target, implying roughly 24% upside from the prior close. The target is anchored to 1.6x the company’s 2027 estimated tangible book value per share, a slight discount to the current multiple of approximately 1.8x. Bread Financial’s stock has climbed from a 52-week low of $53.83 to trade below its 52-week high of $114.53.
Credit metrics showed improvement, with delinquencies and net charge-offs declining year-over-year. Broader U.S. equity benchmarks rose modestly, with the S&P 500 up 0.2%, the Dow Jones up 0.1% and the Nasdaq gaining 0.5%.
