Core Viewpoint - Bread Financial Holdings, Inc. has announced the pricing of a $500 million offering of 6.750% senior notes due 2031, with expected net proceeds of approximately $493 million after expenses [1][2]. Group 1: Notes Offering Details - The senior notes will be sold at 100% of their principal amount and are expected to close on November 6, 2025, subject to customary conditions [1]. - The net proceeds from the notes offering, along with $275 million in cash, will be used to fully redeem the outstanding 9.750% Senior Notes due 2029, which have an aggregate principal amount of $719 million [2]. - A conditional notice has been sent to holders of the 2029 Notes, indicating the intention to redeem them on November 7, 2025, contingent upon the successful completion of the notes offering [3]. Group 2: Guarantees and Regulatory Information - The notes will be guaranteed by the Company's domestic subsidiaries that also guarantee its existing senior notes and senior credit facility [4]. - The notes will not be registered under the Securities Act and will only be offered to qualified institutional buyers or non-U.S. persons in compliance with applicable regulations [5].

Core Insights - Three stocks are highlighted with a buy rank and strong value characteristics as of October 28th: Bread Financial, CNA Financial, and AllianceBernstein [1][2][3] Company Summaries Bread Financial (BFH) - Offers personalized payment, lending, and saving solutions - Holds a Zacks Rank 1 (Strong Buy) - Zacks Consensus Estimate for current year earnings increased by 7.3% over the last 60 days - Price-to-earnings ratio (P/E) is 7.31, significantly lower than the industry average of 19 - Possesses a Value Score of A [1][2] CNA Financial (CNA) - Operates as a property and casualty insurer - Holds a Zacks Rank 1 (Strong Buy) - Zacks Consensus Estimate for current year earnings increased by 2.2% over the last 60 days - Price-to-earnings ratio (P/E) is 9.90, compared to the industry average of 12.70 - Possesses a Value Score of A [2] AllianceBernstein (AB) - Provides diversified investment management services primarily to pension funds, endowments, and individual investors - Holds a Zacks Rank 1 (Strong Buy) - Zacks Consensus Estimate for current year earnings increased by 0.9% over the last 60 days - Price-to-earnings ratio (P/E) is 11.87, lower than the industry average of 13.30 - Possesses a Value Score of A [3]

Core Viewpoint - Bread Financial Holdings, Inc. plans to offer $500 million in senior notes to redeem its outstanding 9.750% Senior Notes due 2029, totaling $719 million [1][2]. Group 1: Notes Offering - The company intends to offer $500 million aggregate principal amount of senior notes in a private offering exempt from registration requirements [1]. - The offering is subject to market and other conditions, with no assurance of successful completion [3]. - The notes will not be registered under the Securities Act and will be offered only to qualified institutional buyers or non-U.S. persons [4]. Group 2: Use of Proceeds - The net proceeds from the notes offering, along with approximately $275 million in cash, will be used to fully redeem the outstanding 2029 Notes, including any make-whole premium [2]. Group 3: Company Overview - Bread Financial is a tech-forward financial services company providing personalized payment, lending, and saving solutions to U.S. consumers [6]. - The company offers general purpose credit cards and savings products, supporting recognized brands in various sectors through private label and co-brand credit cards [6].

Group 1: Bread Financial (BFH) - The company is a tech-forward financial services provider offering personalized payment, lending, and saving solutions [1] - The Zacks Consensus Estimate for its current year earnings has increased by 7.3% over the last 60 days [1] - The company has a Zacks Rank of 1 (Strong Buy) and a dividend yield of 1.3%, compared to the industry average of 0.0% [1] Group 2: CNA Financial (CNA) - CNA Financial offers commercial property and casualty insurance products primarily in the United States [2] - The Zacks Consensus Estimate for its current year earnings has increased by 2.2% over the last 60 days [2] - The company has a Zacks Rank of 1 (Strong Buy) and a dividend yield of 4.1%, compared to the industry average of 0.7% [2] Group 3: Valley National Bancorp (VLY) - Valley National Bancorp provides a range of financial services including commercial, retail, insurance, and wealth management products [3] - The Zacks Consensus Estimate for its current year earnings has increased by 1.1% over the last 60 days [3] - The company has a Zacks Rank of 1 (Strong Buy) and a dividend yield of 4%, compared to the industry average of 2.7% [3]

Financial Performance - Credit sales reached $6.8 billion, up 5% year-over-year, driven by new partner growth and increased general-purpose spending[19] - Total net interest and non-interest income for the quarter was $971 million, down 1% compared to the third quarter of 2024[21] - Net income for the three months ended September 30, 2025, was $188 million, an increase of $186 million compared to $2 million in 2024[33] - Adjusted net income per diluted share increased by 120% to $4.02 for the three months ended September 30, 2025, compared to $1.83 in 2024[33] - PPNR (Pre-Provision Net Revenue) rose by 21% to $495 million for the three months ended September 30, 2025, from $409 million in the prior year[45] - Adjusted net income for Q3 2025 was $191 million, a 105% increase from $93 million in Q3 2024[49] - Net income per diluted share rose to $3.96 in Q3 2025, compared to $0.05 in Q3 2024, marking a significant increase[49] Credit Losses and Provisions - Provision for credit losses decreased, with a $28 million reserve release and net principal losses of $327 million, compared to a $22 million reserve build and net principal losses of $347 million in the prior year[21] - Provision for credit losses decreased by $70 million or 19% to $299 million for the three months ended September 30, 2025, compared to $369 million in 2024[34] - Net principal losses for Q3 2025 were $327 million, down from $347 million in Q3 2024, resulting in a net principal loss rate of 7.4%[54] - The reserve rate for credit losses was 11.7% as of September 30, 2025, reflecting improving credit metrics[37] Expenses and Efficiency - Total non-interest expenses decreased 17% year-over-year to $476 million, primarily due to a $93 million decrease in other expenses[23] - Total non-interest expenses decreased by $98 million or 17% to $476 million for the three months ended September 30, 2025, compared to $574 million in 2024[38] - Efficiency ratio decreased to 49.0% for the three months ended September 30, 2025, down from 58.4% in the prior year[45] Capital and Liquidity - Common equity tier one capital ratio (CET1) increased to 14.0% from 13.3% in the third quarter of 2024, driven by net earnings[24] - The company maintains a strong focus on liquidity, with primary sources including cash from operating activities and bank credit facilities[55] - The company has a robust liquidity risk management framework to monitor liquidity and funding positions against risk appetite metrics[62] - The company met all capital requirements as of September 30, 2025, maintaining capital ratios in excess of the minimums required to qualify as well capitalized[109] - Common equity tier 1 capital ratio for the total company is 14.0%, significantly above the minimum requirement of 4.5%[113] - The company has a tier 1 leverage capital ratio of 12.4%, well above the minimum requirement of 4.0%[113] Deposits and Funding - Direct-to-consumer (DTC) deposits increased 9% to $8.2 billion, with average DTC deposits now representing 47% of total funding, up from 41% a year ago[24] - End-of-period direct-to-consumer deposits grew by 9% to $8,188 million as of September 30, 2025, compared to $7,483 million a year earlier[45] - As of September 30, 2025, total interest-bearing deposits increased to $13,511 million from $13,055 million as of December 31, 2024, representing a growth of 3.5%[86] - Direct-to-consumer (retail) deposits rose to $8,188 million, up from $7,687 million, indicating an increase of 6.5%[86] Tax and Financial Outlook - The effective tax rate for 2025 is expected to be in the range of 19% to 20% due to larger discrete items realized in 2025[29] - The 2025 financial outlook anticipates a full year net principal loss rate ranging from 7.8% to 7.9%[28] - The effective income tax rate for continuing operations was 4.3% for the three months ended September 30, 2025, down from 92.2% in 2024[41] Shareholder Returns - A quarterly cash dividend of $0.23 per share was declared on October 23, 2025, payable on December 12, 2025, to stockholders of record[98] - The company repurchased a total of 3.8 million shares for $190 million during the nine months ended September 30, 2025, with $160 million remaining for future repurchases as of that date[97] - The company’s stock repurchase program was increased by an additional $200 million on October 23, 2025, bringing the total available for future repurchases to $340 million[96] Debt and Financing Activities - The company issued $400 million in aggregate principal amount of 8.375% Fixed-Rate Reset Subordinated Notes due 2035 in March 2025[83] - The company completed a cash Tender Offer repurchasing $150 million of Senior Notes due 2029, resulting in a $13 million loss on extinguishment[81] - The company redeemed $100 million of Senior Notes due 2026 in January 2025 using cash on hand[73] - The company maintained a $700 million undrawn Revolving Credit Facility as of September 30, 2025, maturing in October 2028[71] Regulatory and Compliance - The consent order issued by the FDIC in November 2023 does not impose any monetary penalties on the Servicer[118] - The Servicer has submitted nearly all required deliverables under the consent order to the FDIC for review[119] - Credit ratings for senior unsecured debt improved, with Moody's upgrading to Ba2 and S&P changing outlook to "Positive" as of October 2025[66] Market and Risk Management - Market risk exposure remains stable with no material changes reported since the 2024 Form 10-K[265]

Core Insights - The comparison between Bread Financial Holdings (BFH) and Blackstone Inc. (BX) indicates that BFH may offer better value for investors currently [1] Valuation Metrics - BFH has a forward P/E ratio of 7.31, significantly lower than BX's forward P/E of 30.33, suggesting BFH is undervalued [5] - The PEG ratio for BFH is 0.55, while BX's PEG ratio is 1.24, indicating BFH's expected earnings growth is more favorable [5] - BFH's P/B ratio stands at 0.92, compared to BX's P/B of 5.73, further highlighting BFH's relative undervaluation [6] Earnings Outlook - BFH currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while BX has a Zacks Rank of 3 (Hold) [3] - The solid earnings outlook for BFH contributes to its superior valuation metrics compared to BX, which has a lower Value grade [6]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through the Zacks Momentum Style Score [2] Group 2: Bread Financial Holdings (BFH) Analysis - BFH has shown a four-week price change of 9.9%, indicating growing investor interest [3] - Over the past 12 weeks, BFH's stock gained 13.8%, with a beta of 1.41, suggesting it moves 41% more than the market [4] - BFH has a Momentum Score of A, indicating a favorable entry point for investors [5] Group 3: Earnings Estimates and Valuation - BFH has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - The stock is trading at a Price-to-Sales ratio of 0.65, suggesting it is undervalued at 65 cents for each dollar of sales [6] Group 4: Additional Investment Opportunities - Besides BFH, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles [8]

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]