Bread Financial Holdings Inc (NYSE: BFH) advanced 2.8% on Tuesday after Wolfe Research upgraded the stock to Outperform from Peerperform, setting a $130 price target.
Analyst Darrin Peller highlighted the company’s ongoing transformation, noting that Bread Financial remains in the mid-to-late stages of its strategic shift. Peller emphasized expectations for continued earnings growth acceleration, disciplined expense management, and improving credit quality as key drivers of the upgrade. The firm’s price target assumes a 1.6x multiple on 2027 estimated tangible book value per share (TBVPS), below the current 1.8x valuation.
Wolfe Research’s call is largely contingent on Bread Financial’s ability to compound tangible book value at a high-teens percentage rate. The analyst also projected normalized returns on tangible common equity (ROTCE) exceeding 20%, suggesting potential for a modest valuation multiple expansion as the company delivers on its financial targets.
Bread Financial’s shares have re-rated significantly in recent periods, reflecting investor confidence in its business model transition. The upgrade follows a period of operational discipline and credit performance improvements, which Peller cited as critical to sustaining long-term value creation.
