Bank of America Securities analyst Mihir Bhatia has maintained their bullish stance on BFH stock, giving a Buy rating on February 12.
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Mihir Bhatia has given his Buy rating due to a combination of factors surrounding Bread Financial Holdings’ current financial trajectory and market positioning. The company has demonstrated an encouraging trend in credit performance, with improvements noted in December and January. Although there are expectations of some losses due to external factors like delayed hurricane impacts, the overall credit outlook remains positive, suggesting potential for improved loss projections by 2025.
Moreover, despite ongoing regulatory uncertainties, Bread Financial is proactively implementing mitigants such as higher APRs and fees to manage potential future challenges. These steps are anticipated to improve net interest margins, balancing out the effects of any regulatory changes and economic factors like Fed rate cuts. Additionally, Bread Financial’s valuation appears reasonable, trading at less than seven times its estimated earnings per share for 2026, indicating that the stock may be undervalued. These combined elements contribute to the Buy rating, reflecting confidence in the company’s ability to navigate current challenges and capitalize on future growth opportunities.