Core Insights - The third-quarter earnings season has started strongly, particularly driven by the Finance sector, which has positively influenced equity markets despite ongoing economic challenges [1] - A weak labor market has led to increased expectations for the Federal Reserve to continue lowering the benchmark lending rate throughout 2025, further boosting investor sentiment [1] Investment Opportunities - Investors are encouraged to create portfolios aimed at solid returns, with broker recommendations serving as a valuable resource due to brokers' expertise in market dynamics [2] - Notable broker-friendly stocks to monitor include Par Pacific Holdings (PARR), Cooper-Standard (CPS), Bread Financial (BFH), American Airlines (AAL), and CVR Energy (CVI) for their rising estimates and strong fundamentals [2][6] Stock Screening Methodology - A screening process has been established to identify stocks based on improved broker recommendations and upward revisions in earnings estimates over the past four weeks, incorporating the price/sales ratio as a key valuation metric [3][4] - The screening criteria include identifying the top 75 companies with net upgrades, the top 10 stocks with earnings estimate revisions, and the bottom 10% of stocks based on the price/sales ratio [4][5] Company Highlights - Par Pacific Holdings operates an integrated energy platform with a refining capacity of 219,000 barrels per day and has consistently beaten earnings estimates [5][6] - Cooper-Standard is experiencing significant earnings growth, expected to rise by 137.8% year-over-year, driven by advancements in hybrid and electric vehicle technologies [7][8] - Bread Financial benefits from data-driven marketing strategies and solid growth in Card Services, with a Zacks Rank of 3 [8][9] - American Airlines is seeing increased air travel demand and low fuel costs, projecting a 0.5% revenue increase in 2025 [9][10] - CVR Energy is focused on renewable energy and has a Zacks Rank of 3, with a commitment to reducing carbon emissions [10][11]

Core Insights - Bread Financial Holdings (BFH) reported an operating income of $4.02 per share for Q3 2025, exceeding the Zacks Consensus Estimate by 90.5% and more than doubling year-over-year [1][8] - The quarterly performance was driven by increased credit sales and reduced non-interest expenses, although it faced challenges from lower average and end-of-period loans and interest income [1][8] Revenue Analysis - Revenues decreased by 1.2% year-over-year to $971 million, primarily due to lower billed late fees from reduced delinquencies and a $4 million gain on portfolio sale in 2024, partially offset by lower interest expenses and new pricing changes [2] - The top line still surpassed the consensus estimate by 0.2% [2] Credit Sales and Loans - Credit sales reached $6.8 billion, marking a 5% increase year-over-year, attributed to new partner growth and increased general-purpose spending [3] - Average loans decreased by 1% to $17.6 billion, while end-of-period loans fell by 2% to $17.7 billion due to higher payment rates and ongoing elevated gross losses [3] Interest Income and Margins - Total interest income declined by 3% to $1.2 billion, aligning with estimates [3] - The net interest margin remained stable at 18.8%, surpassing the Zacks Consensus Estimate of 18.2% [4] Expense Management - Total non-interest expenses decreased by 17%, influenced by the prior year's impact from repurchased debt [4] - The delinquency rate improved to 6% from 6.4% year-over-year, while the net loss rate improved by 40 basis points to 7.4% [4] Financial Metrics - Tangible book value increased by 19% year-over-year to $56.36 per share as of September 30, 2025 [5] - Return on average equity rose to 22.4%, expanding by 2,200 basis points year-over-year [5] Capital Deployment - The board of directors approved a 10% increase in the dividend to 23 cents per share, payable on December 12 to stockholders of record as of November 7 [6] - An additional $200 million was authorized for share repurchases, bringing the total available for repurchases to $340 million [6] Future Guidance - BFH anticipates average credit card and other loans to remain flat to slightly down from 2024, with total revenues expected to be relatively flat due to pricing changes [7] - The net loss rate is projected to be between 7.8% and 7.9%, with expectations of improvement driven by resilient consumer behavior and credit management actions [9]

Core Insights - Bread Financial Holdings (BFH) reported $971 million in revenue for Q3 2025, a year-over-year decline of 1.2% [1] - The company achieved an EPS of $4.02, significantly up from $1.84 a year ago, resulting in an EPS surprise of +90.52% compared to the consensus estimate of $2.11 [1] Financial Performance Metrics - Efficiency Ratio stood at 49%, better than the three-analyst average estimate of 53% [4] - Net loss rate was 7.4%, slightly better than the average estimate of 7.6% [4] - Net Interest Margin was reported at 18.8%, exceeding the average estimate of 18.2% [4] - Total interest income matched the estimate at $1.24 billion [4] - Interest on cash and investment securities was $44 million, below the average estimate of $48.32 million [4] - Interchange revenue was reported at -$111 million, worse than the average estimate of -$102.99 million [4] - Interest and fees on loans reached $1.2 billion, slightly above the average estimate of $1.19 billion [4] - Net interest income was $1.03 billion, surpassing the average estimate of $1.02 billion [4] - Total non-interest income was -$61 million, worse than the average estimate of -$53.03 million [4] - Other income was reported at $50 million, slightly above the average estimate of $49.18 million [4] Stock Performance - Shares of Bread Financial have returned -0.3% over the past month, compared to the Zacks S&P 500 composite's +0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - The company reported a net income of $188 million and adjusted net income of $191 million for Q3 2025, with earnings per diluted share at $4.02, excluding a $3 million post-tax impact from repurchased debt expenses [5][6] - Tangible book value per common share increased by 19% year-over-year to $56.36, and return on average tangible common equity was 28.6% for the quarter [5][6] - Average loans decreased by 1% year-over-year to $17.6 billion, while revenue declined by 1% year-over-year to $971 million [12][13] Business Line Data and Key Metrics Changes - Credit sales reached $6.8 billion, up 5% year-over-year, driven by new partner growth and higher general purpose spending [12][13] - Non-interest income decreased by $7 million year-over-year, influenced by higher retailer share arrangements [15] - Total non-interest expenses decreased by $98 million, with adjusted total non-interest expenses down 1% year-over-year [13][19] Market Data and Key Metrics Changes - The delinquency rate for Q3 was 6.0%, down 40 basis points year-over-year, while the net loss rate was 7.4%, also down 40 basis points year-over-year [21][22] - Direct-to-consumer deposits grew to $8.2 billion, accounting for 47% of average funding, up from 41% a year ago [18][19] Company Strategy and Development Direction - The company is focused on responsible growth and executing its business strategy while maintaining expense discipline [8][9] - There is an ongoing investment in technology modernization, digital advancement, and product innovation to drive future growth [9][10] - The company aims to expand its vertical and product offerings, particularly in the home sector, to enhance income diversification [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer financial health remained resilient despite inflationary concerns and a slowing job market [5][6] - The company expects to achieve a full-year net loss rate in the guided range of 7.8%-7.9%, with confidence in credit trends and performance [24] - Management remains cautious about macroeconomic uncertainties, including inflation and consumer sentiment, while monitoring these trends closely [30][31] Other Important Information - The company announced a $200 million increase to its share repurchase authorization and a 10% increase in its quarterly cash dividend to $0.23 per common share [9][21] - A credit rating upgrade and positive outlook from Moody's were achieved, reflecting improvements in financial resilience and risk management [11][19] Q&A Session Summary Question: Signs of weakness in the portfolio - Management indicated that the macro environment has been surprisingly resilient, with stable consumer metrics and no significant signs of weakness in their portfolio [29][30] Question: Loan growth expectations - Management expressed optimism about loan growth due to positive credit sales trends and new partner signings, indicating a robust pipeline [40] Question: Impact of payment rate changes on loan growth - Management noted that the mix of business will influence loan growth, with larger ticket items potentially leading to lower payment rates [44] Question: Trends in interchange revenues - Management explained that interchange revenues are influenced by various factors, including sales-based rebates and revenue shares with partners [54][55] Question: Focus on the home vertical - Management confirmed that the home vertical is a key focus area, with plans to expand partnerships and offerings in this sector [59][60] Question: Capital return strategy - Management reiterated their commitment to responsible growth while maintaining strong capital ratios, with future capital actions dependent on growth opportunities [62][63] Question: Consumer sentiment and spending trends - Management acknowledged that consumers are likely to seek discounts and promotions, especially during the holiday season, which may influence spending behavior [82]

Financial Data and Key Metrics Changes - The company reported net income of $188 million and adjusted net income of $191 million for Q3 2025, with earnings per diluted share at $4.02, excluding a $3 million post-tax impact from repurchased debt expenses [5][6] - Tangible book value per common share increased by 19% year over year to $56.36, and return on average tangible common equity was 28.6% for the quarter [5][6] - Average loans decreased by 1% year over year to $17.6 billion, while revenue was down 1% year over year to $971 million [12][13] Business Line Data and Key Metrics Changes - Credit sales reached $6.8 billion, a 5% increase year over year, driven by new partner growth and higher general purpose spending [12] - Non-interest income decreased by $7 million year over year, influenced by higher retailer share arrangements [15] - Total non-interest expenses decreased by $98 million, with adjusted total non-interest expenses down 1% year over year [13][15] Market Data and Key Metrics Changes - The delinquency rate for Q3 was 6.0%, down 40 basis points year over year, while the net loss rate was 7.4%, also down 40 basis points year over year [22][23] - Direct-to-consumer deposits grew to $8.2 billion, accounting for 47% of average funding, up from 41% a year ago [18][19] Company Strategy and Development Direction - The company is focused on responsible growth and executing its business strategy, with continued investments in technology modernization and product innovation [8][10] - The expansion into new verticals, particularly in the home sector, is seen as a significant opportunity for profitable growth [10][11] - The company aims to maintain expense discipline while achieving positive operating leverage, with a CET1 ratio at the top of the targeted range of 13% to 14% [9][19] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer financial health remained resilient despite inflationary concerns and a slowing job market [5][6] - The outlook for credit sales trends is positive, with expectations to be at the low end of the full-year net loss rate range of 7.8% to 7.9% [6][25] - Management expressed confidence in achieving long-term financial targets and increasing shareholder value over time [8][10] Other Important Information - The company announced a $200 million increase to its share repurchase authorization and a 10% increase in its quarterly cash dividend to $0.23 per common share [9][21] - A credit rating upgrade and positive outlook from Moody's was achieved, reflecting improvements in financial resilience and risk management [11][19] Q&A Session Summary Question: Have you seen any signs of weakness in your portfolio? - Management indicated that consumer metrics have been surprisingly resilient, with stable gradual improvement across all vantage bands, and no significant cracks observed in the portfolio [30][31] Question: What is the outlook for loan growth? - Management expects loan growth to pick up, supported by credit sales moving in the right direction and new partner signings [41] Question: How do you view the impact of discounts on consumer spending? - Management anticipates retailers will push discounts earlier in the holiday season, which could influence consumer spending positively [83] Question: Is your underwriting still tight? - Management confirmed that underwriting remains focused on long-term profitability, with targeted adjustments being made based on risk and reward [86][87]

Financial Data and Key Metrics Changes - The company reported net income of $188 million and adjusted net income of $191 million for Q3 2025, with earnings per diluted share at $4.02, excluding a $3 million post-tax impact from repurchased debt expenses [4][5] - Tangible book value per common share increased by 19% year over year to $56.36, and return on average tangible common equity was 28.6% for the quarter [4][5] - Credit sales rose by 5% year over year to $6.8 billion, despite a decrease in average loans by 1% year over year to $17.6 billion [11][12] Business Line Data and Key Metrics Changes - Revenue decreased by 1% year over year to $971 million, impacted by lower billed late fees and higher retailer share arrangements [11][12] - Total non-interest expenses decreased by $98 million, with adjusted total non-interest expenses down 1% year over year [12][13] - The company experienced a decrease in net interest income by 1% year over year, attributed to lower billed late fees and a shift in risk and product mix [13][16] Market Data and Key Metrics Changes - The delinquency rate for Q3 was 6.0%, down 40 basis points year over year, while the net loss rate was 7.4%, also down 40 basis points year over year [20][21] - Direct-to-consumer deposits grew to $8.2 billion, accounting for 47% of average funding, up from 41% a year ago [17][18] - The CET1 ratio improved to 14.0%, up 100 basis points sequentially and 70 basis points year over year [18][19] Company Strategy and Development Direction - The company is focused on responsible growth and executing its business strategy while investing in technology modernization and product innovation [6][7] - New brand partnerships in the home vertical, including Bed Bath & Beyond and Raymour & Flanagan, are expected to drive future growth [9][10] - The company aims to maintain expense discipline and operational excellence, with a commitment to returning value to shareholders through increased dividends and share repurchases [8][10] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer financial health remained resilient, with strong credit sales and lower delinquencies despite ongoing inflationary concerns [4][5] - The outlook for the remainder of the year remains unchanged, with expectations for credit sales trends to continue positively [6][24] - Management expressed confidence in achieving full-year positive operating leverage and maintaining a net loss rate within the guided range of 7.8% to 7.9% [24][25] Other Important Information - The company announced a $200 million increase to its share repurchase authorization and a 10% increase in its quarterly cash dividend to $0.23 per common share [8][20] - A credit rating upgrade and positive outlook from Moody's were recognized, reflecting improvements in financial resilience and risk management [10][18] Q&A Session Summary Question: Signs of weakness in the portfolio - Management indicated that consumer metrics have been surprisingly resilient, with stable macro conditions and no significant signs of weakness in their portfolio [28][29] Question: Loan growth expectations - Management expects loan growth to pick up as credit quality improves and new partnerships are established, indicating a healthy consumer environment [34] Question: Trends in credit sales and holiday shopping - Management noted that credit sales are currently positive, with expectations for aggressive retailer promotions during the holiday season to attract consumers [46] Question: Impact of discounts on Bread Financial - Management anticipates that retailers will likely push discounts earlier in the buying cycle, which could influence consumer spending behavior [71] Question: Underwriting standards and growth - Management confirmed that underwriting remains prudent and focused on profitability, with gradual adjustments based on improving credit quality and macroeconomic conditions [75][76]

Financial Data and Key Metrics Changes - The company reported net income of $188 million and adjusted net income of $191 million for Q3 2025, with earnings per diluted share of $4.2, excluding a $3 million post-tax impact from debt repurchase expenses [3][4] - Tangible book value per common share increased by 19% year over year to $56.36, and return on average tangible common equity was 28.6% for the quarter [3][4] - Total sales for the quarter were $6.8 billion, a 5% increase year over year, driven by new partner growth and higher general purpose spending [10][11] Business Line Data and Key Metrics Changes - Credit sales increased by 5% year over year, supported by strong back-to-school shopping, particularly in apparel and beauty [4][10] - Average loans decreased by 1% year over year to $17.6 billion, influenced by higher payment rates and elevated gross credit losses [11][12] - Non-interest income decreased by $7 million year over year, primarily due to higher retailer share arrangements [13] Market Data and Key Metrics Changes - The delinquency rate for Q3 was 6%, down 40 basis points year over year, while the net loss rate was 7.4%, also down 40 basis points year over year [20] - The reserve rate improved to 11.7% at quarter end, reflecting better credit metrics and higher quality new vintages [21][22] Company Strategy and Development Direction - The company is focused on responsible growth and executing its business strategy, with ongoing investments in technology modernization and product innovation [6][8] - A $200 million share repurchase program was initiated, with a 10% increase in the quarterly cash dividend to $0.23 per common share [7][19] - The company aims to leverage its full product suite and omnichannel customer experience to extend category leadership while expanding into new verticals [9][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumer financial health, despite ongoing inflationary concerns and a stable job market [4][5] - The company anticipates a gradual improvement in credit metrics and expects to achieve a full-year net loss rate in the guided range of 7.8% to 7.9% [24][25] - Management remains cautious about macroeconomic uncertainties, including inflation and consumer sentiment, while monitoring these trends closely [23][30] Other Important Information - The company received a credit ratings upgrade and positive outlook from Moody's, recognizing its progress in financial resilience and risk management [9][16] - Direct to consumer deposits accounted for 47% of average funding, up from 41% a year ago, enhancing the funding mix [16][17] Q&A Session Summary Question: Have you seen any signs of weakness in your portfolio? - Management noted that consumer metrics have been surprisingly resilient, with stable gradual improvement across all credit bands, and no significant cracks observed in the portfolio [30][33] Question: What is the outlook for loan growth? - Management indicated that with credit sales moving in the right direction and new partnerships being signed, loan growth is expected to pick up going forward [39][40] Question: How do you expect credit sales to trend in Q4 and into 2026? - Management expects credit sales to remain positive, with retailers likely to offer discounts and promotions to attract consumers during the holiday season [56][57] Question: What is the company's approach to AI and automation? - The company views AI as an opportunity to enhance operational excellence, improve efficiency, and drive growth, with over 200 machine learning models already in use [88][90]

Core Insights - Bread Financial Holdings (BFH) reported quarterly earnings of $4.02 per share, significantly exceeding the Zacks Consensus Estimate of $2.11 per share, and up from $1.84 per share a year ago [1][2] - The earnings surprise for this quarter was +90.52%, following a previous surprise of +69.73% in the last quarter [2] - The company generated revenues of $971 million for the quarter ended September 2025, slightly surpassing the Zacks Consensus Estimate by 0.46%, but down from $983 million year-over-year [3] Earnings Performance - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $958.53 million, and for the current fiscal year, it is $8.33 on revenues of $3.87 billion [8] Stock Performance and Outlook - Bread Financial shares have declined approximately 0.9% year-to-date, contrasting with the S&P 500's gain of 13.9% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Financial - Miscellaneous Services industry, to which Bread Financial belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9] - Another company in the same industry, Sachem Capital Corp. (SACH), is expected to report quarterly earnings of $0.01 per share, reflecting a year-over-year increase of +107.7% [10]

Financial Performance - Net income reached $188 million, with diluted earnings per share at $3.96, including a $38 million favorable discrete tax item and a $3 million post-tax impact from repurchased debt[5] - Adjusted net income was $191 million[7] - Revenue totaled $1 billion[7] - Tangible book value per common share increased by $8.88, or 19%, year-over-year to $56.36[5] - Return on average tangible common equity was 28.6%[5] Deposits and Funding - Direct-to-consumer deposits increased by 9% year-over-year to $8.2 billion, representing 47% of average total funding[5] Capital Allocation - The company announced a share repurchase authorization of $200 million in August and repurchased 0.6 million shares during the quarter[5] - An additional 0.4 million shares were repurchased in October, totaling 1 million shares for $60 million[5] - A $200 million increase to the share repurchase authorization was announced, bringing the total available to $340 million[5] - A quarterly cash dividend of $0.23 per common share was declared, a 10% increase from the prior quarter[5] Credit Quality - The delinquency rate decreased from 6.4% to 6.0% compared to the third quarter of 2024[12] - The net loss rate decreased from 7.8% to 7.4% compared to the third quarter of 2024[12]

Financial Performance - Net income for Q3 2025 was $188 million, with earnings per diluted share of $3.96, reflecting a favorable discrete tax item of $38 million[7]. - Adjusted net income for Q3 2025 was $191 million, compared to $93 million in Q3 2024, representing a significant increase of 105% year-over-year[68]. - The company reported a net income of $188 million for Q3 2025, compared to $2 million in Q3 2024, marking a substantial increase[68]. - Net income for Q3 2023 was $173 million, with earnings per diluted share at $3.46[47]. - The return on average assets rose significantly to 3.4% in Q3 25 from 0.1% in Q3 2024, showcasing improved profitability[43]. - The return on average equity for Q3 2023 was 24.8%, reflecting strong profitability[45]. - Adjusted earnings per diluted share for Q3 2025 were $4.02, compared to $1.83 in Q3 2024, reflecting a growth of approximately 120% year-over-year[68]. Credit and Delinquency Metrics - The delinquency rate improved to 6.0%, down from 6.4% in Q3 2024, while the net loss rate decreased to 7.4% from 7.8%[13]. - The delinquency rate improved to 6.0% in 3Q25 from 6.4% in 3Q24, indicating better credit performance[43]. - The net loss rate for 2025 is expected to improve to between 7.8% and 7.9%, down from 8.2% in 2024, due to resilient consumer behavior and effective credit management actions[26]. - Provision for credit losses for YTD 2025 was $869 million, down from $980 million in YTD 2024, indicating a decrease of about 11%[69]. - Delinquency rates peaked at 6.5% in 4Q21, with a 15-year average rate of approximately 4.9%[53]. - Net loss rates peaked at 8.9% in 4Q10, with a 15-year average rate of around 5.9%[53]. Capital and Equity - The CET1 capital ratio improved to 14.0% in Q3 2025, up from 13.3% in Q3 2024[20]. - Tangible book value per common share increased by $8.88, or 19%, year-over-year, reaching $56.36[7]. - Tangible book value per common share increased by 19% to $56.36 in 3Q25 from $47.48 in 3Q24[43]. - Tangible common equity over tangible assets (TCE/TA) is utilized to assess capital adequacy, with TCE for Q3 2025 at $2,594 million[69]. - Common equity tier 1 capital ratio for the total company was 12.9% in 3Q23, projected to decrease to 12.0% by 1Q25[50]. - Total risk-based capital ratio for the total company was 14.2% in 3Q23, expected to rise to 15.5% by 1Q25[50]. - Tangible common equity to tangible assets ratio was 10.0% in 3Q23, projected to reach 12.4% by 3Q25[50]. - Average tangible common equity for Q3 2025 was $2,607 million, an increase from $2,566 million in Q3 2024, showing a growth of approximately 2%[69]. Operational Efficiency - Total non-interest expenses decreased by $98 million, or 17%, primarily due to the prior year impact from repurchased debt[13]. - Total non-interest expenses decreased by 17% compared to 3Q24, reflecting strategic adjustments in employee compensation and benefits[34]. - Total non-interest expenses for Q3 2025 were $476 million, down from $574 million in Q3 2024, reflecting a decrease of approximately 17% year-over-year[68]. - The efficiency ratio improved to 49.0% in 3Q25, down from 58.4% in 3Q24, indicating enhanced operational efficiency[43]. - The efficiency ratio for Q3 2023 was 48.7%, indicating operational efficiency[45]. Revenue and Sales - Credit sales amounted to $6.8 billion, an increase of $0.3 billion or 5%, driven by new partner growth and increased general-purpose spending[13]. - Revenue for 2025, excluding any gain on portfolio sale, is expected to remain flat at $3,827 million, impacted by pricing changes and interest rate reductions by the Federal Reserve[26]. - Credit sales for Q3 2023 were $6,668 million, showing a year-over-year decline of 13%[45]. - Average credit card and other loans decreased by 8% year-over-year to $17,540 million in Q3 2023[45]. - Net interest income for Q3 2023 was $1,082 million, with total interest income at $1,301 million[47]. - The net interest margin for Q3 2025 is projected to be 18.8%[49]. Deposits - Direct-to-consumer deposits reached $8.2 billion, marking a 9% year-over-year increase and representing 47% of average total funding[7]. - End-of-period direct-to-consumer deposits increased by 9% to $8,188 million in 3Q25 compared to $7,483 million in 3Q24[43]. - End-of-period direct-to-consumer deposits increased by 18% year-over-year, reaching $6,098 million in Q3 2023[45]. Shareholder Returns - A quarterly cash dividend of $0.23 per common share was declared, representing a 10% increase from the prior quarter[7]. - The company announced a $200 million increase to its share repurchase authorization, bringing the total available for repurchases to $340 million[7]. Strategic Focus - The company plans to focus on responsible growth and disciplined capital allocation to manage macroeconomic and regulatory challenges in 2025[30]. - The company emphasizes the importance of forward-looking statements regarding future financial performance and market conditions[63]. - Non-GAAP financial measures are used to provide additional clarity in understanding operational results and trends[66].