Bread Financial initiated with a Market Perform at BMO Capital

BMO Capital initiated coverage of Bread Financial with a Market Perform rating and $33 price target. Shares rallied by 20% into year-end and the firm’s target price implies no upside remaining, the analyst tells investors. While the firm says it admires management for transforming its prior credit card services business, as part of Alliance Data Systems (ADS), to a stand-alone store card enterprise, the firm worries that fast growth in the balance of loans more than 90 days past due but still accruing portends higher loan losses than would have been expected by investors.