Bread Financial announces $150 million stock buyback

Published 05/03/2025, 13:50
Bread Financial announces $150 million stock buyback

COLUMBUS, Ohio - Bread Financial Holdings, Inc. (NYSE: BFH), a financial services company currently trading at $50.51 with a market capitalization of $2.48 billion, has revealed a new share repurchase program with no set expiration date, under which the company may buy back up to $150 million of its common stock. The announcement was made on Wednesday, indicating an ongoing strategy to bolster the company’s financial foundation. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimates.

According to Bread Financial’s president and CEO, Ralph Andretta, this move is part of a broader effort to reinforce the company’s balance sheet. Over the past five years, the company has focused on building capital and reducing debt. The new share repurchase plan, coupled with the issuance of Tier 2 capital, aims to further solidify the company’s total capital ratios while maintaining flexibility for future growth and capital optimization. InvestingPro data shows the company maintains strong profitability with a P/E ratio of 9.13x and has maintained dividend payments for 10 consecutive years, though analysts note the stock’s recent volatile price movements.

The repurchase of shares will hinge on market conditions and other considerations, including adherence to legal and regulatory requirements and obtaining necessary approvals. The plan does not compel Bread Financial to acquire a predetermined number of shares, and it can be paused or discontinued at any time.

Bread Financial operates as a technology-forward company offering a range of payment, lending, and saving solutions to consumers in the United States. The company’s portfolio includes general purpose credit cards, savings products, and branded credit cards, catering to sectors such as travel, entertainment, health, and retail. Recent financial data from InvestingPro reveals the company generated $2.44 billion in revenue and maintains healthy profitability metrics, with analysts projecting continued growth in earnings for the upcoming year. Get access to 8 more exclusive ProTips and comprehensive analysis through InvestingPro’s detailed research reports.

The company’s press release also contains forward-looking statements regarding its share repurchase intentions and the potential effects on share count dilution. However, these statements are based on current market conditions and the company’s beliefs, which are subject to change. Bread Financial emphasizes that forward-looking statements are not guarantees of future performance and are affected by risks and uncertainties that could cause actual results to differ materially.

The information for this article is based on a press release statement from Bread Financial Holdings, Inc.

In other recent news, Bread Financial Holdings Inc. reported its fourth-quarter 2024 financial results, where the company exceeded analysts’ expectations with an adjusted diluted earnings per share (EPS) of $0.41, surpassing the forecast of $0.3209. However, the company’s revenue for the quarter fell short of predictions, coming in at $90 million, marking a 9% year-over-year decline. Despite the earnings beat, the company experienced a slight decrease in credit card and other loans, which stood at $18,366 million as of January 31, 2025. Additionally, Bread Financial announced plans to offer $400 million in fixed-rate reset subordinated notes in a private offering, intending to use at least $250 million of the proceeds for subordinated debt to Comenity Capital Bank.

JMP Securities maintained its Market Perform rating on Bread Financial, highlighting challenges such as increasing market competition and uncertainties in net interest margins due to a shift towards co-branded cards. This rating reflects a neutral stance on the company’s stock, suggesting it may perform in line with broader market averages. The company also reported a decline in both its net loss rate and delinquency rate for January 2025 compared to the previous year, indicating a positive trend in credit performance. Despite these developments, Bread Financial’s stock performance and future outlook remain under scrutiny as it navigates the competitive financial landscape.

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