Bread Financial Holdings, Inc.: 2Q26 Earnings: Strong Beat and Raise

Research evidence excerpt

Bread Financial Holdings, Inc.: 2Q26 Earnings: Strong Beat and Raise

Update

July 23, 2026 08:30 PM GMT

Morgan Stanley & Co. LLCMBread Financial Holdings, Inc. | North America Jeffrey Adelson, CFA

Equity Analyst

2Q26 Earnings: Strong Beat and Jeff.Adelson@morganstanley.comJoseph Leeman +1 212 761-1761

Research Associate

Joseph.Leeman@morganstanley.com +1 212 761-4381

Raise

Bread Financial Holdings, Inc. (BFH.N, BFH UN)

What’s Changed Consumer Finance | United States of America

Bread Financial Holdings, Inc. (BFH.N) From To Stock Rating Equal-weight

Price Target $102.00 $107.00 Industry View In-Line

Price target $107.00

Shr price, close (Jul 22, 2026) $101.87

Mkt cap, curr (mm) $4,021

AlphaSignals Earnings Reaction 52-Week Range $109.91-53.90

Unchanged Meaningful upside Modest revision higher

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Strong 2Q beat, with loan growth acceleration coming through

and continued credit improvement, driving FY26 guide higher.

Fee income better than expected, but timing of RSA is likely

more of a headwind in 2H. 2027 EPS up 5% to $13.34; we see

most of this reflected in price today at ~8x P/E.

Key Takeaways

Strong beat of MSe by 88c (+33%) driven by better NII (19c), fee revenues (+52c,

as higher interchange/merchant fees offset higher RSA), and expenses (16c).

BFH raised average loan & revenue growth '26 guidance to +LSD-to-MSD from

+LSD, reduced NCOs to 7.0-7.1% from 7.2-7.4% (latter already expected by MSe/

Cons).

Credit continues to improve nicely, with DQs down 47bps y/y to 5.25% or the

lowest in nearly 4 years. BFH sees 3Q NCOs down ~30bps q/q.

Buybacks of $241M almost double MSe, but likely slow in 2H; we see $80M in