BFH

Bread Financial is a private-label credit card lender trading at just 9.6x trailing earnings and ~1.36x book value ($3.33B equity on a $4.52B market cap), despite a sharp earnings recovery. FY2025 net income rose 87% to $518M and diluted EPS jumped 98% to $10.89, helped by a 12.2% reduction in shares outstanding from $313M of buybacks (up from $55M the prior year). The MD&A confirms the operational story: provision for credit losses fell 11% to $1.24B (vs. +14% the prior year), non-interest expenses dropped 3%, and pre-tax income from continuing operations surged 61% to $615M. ROTCE rebounded to 20.4% from 11.4%, and the effective tax rate fell to 15.2% from 26.7% — a meaningful tailwind worth flagging as partly non-recurring.

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