US Bancorp DE Reduces Stake in Bread Financial Holdings by 8.3%

US Bancorp DE has reduced its stake in Bread Financial Holdings, Inc. (NYSE: BFH) by 8.3% during the second quarter of 2024, as revealed in its recent filing with the Securities and Exchange Commission (SEC). The financial institution now holds 14,778 shares of Bread Financial after selling 1,344 shares during this period. As of the end of June, the value of US Bancorp’s holdings in Bread Financial was approximately $844,000.

Various institutional investors have also made adjustments to their positions in Bread Financial. For instance, American Century Companies Inc. increased its stake by 5.8% in the first quarter, bringing its total to 1,461,844 shares, valued at $73,209,000 after acquiring an additional 79,709 shares. Wellington Management Group LLP made a more substantial increase, raising its stake by 45.0% to own 1,320,418 shares, valued at $66,127,000, following the purchase of 409,877 shares.

Goldman Sachs Group Inc. reported a significant increase in its holdings, raising its stake by 104.8% to 736,604 shares, worth $36,889,000 after buying an additional 376,920 shares. Other notable investors include Pzena Investment Management LLC, which raised its stake by 0.8%, and Northern Trust Corp, which increased its stake by 0.9%.

99.52% of Bread Financial’s stock is now held by hedge funds and other institutional investors, reflecting significant institutional interest in the company.

Analyst Ratings and Price Targets

Bread Financial has been the subject of several research reports from financial analysts. Royal Bank of Canada adjusted its target price from $65.00 to $74.00, maintaining a “sector perform” rating as of July 25, 2024. Conversely, Keefe, Bruyette & Woods lowered its target price from $88.00 to $71.00 while issuing an “outperform” rating on October 1, 2024.

Morgan Stanley also made adjustments, raising its target price from $51.00 to $53.00 but giving the company an “underweight” rating. Weiss Ratings reaffirmed a “hold (C+)” rating on October 8, while Evercore ISI revised its target price from $68.00 to $64.00, maintaining an “in-line” rating.

Currently, the stock has received three Buy ratings, six Hold ratings, and three Sell ratings, leading to an average rating of “Hold” with a consensus price target of $66.20, according to MarketBeat.com.

Current Stock Performance and Financials

As of the last trading session on July 24, 2024, shares of BFH opened at $59.09. The company boasts a market capitalization of $2.76 billion and a price-to-earnings ratio of 10.00. Its fifty-day moving average stands at $60.94, while the two-hundred-day moving average is $56.08. Over the past year, the stock has fluctuated between a low of $38.21 and a high of $68.01.

In its latest earnings report released on July 24, 2024, Bread Financial reported earnings per share of $3.14, exceeding analysts’ expectations of $1.85 by a notable margin of $1.29. The company generated revenue of $929 million for the quarter, which fell short of the anticipated $944.69 million. Year-over-year, revenue decreased by 1.1%, with the prior year’s earnings per share recorded at $2.66. Analysts project that Bread Financial will post earnings per share of $6.45 for the current fiscal year.

In addition to the earnings report, the company recently announced a quarterly dividend of $0.21 per share, paid on September 12, 2024, to shareholders recorded on August 8, 2024. This represents an annualized dividend of $0.84 and a yield of 1.4%. The company’s payout ratio stands at 14.21%.

Corporate Developments and Insider Activity

On August 27, 2024, Bread Financial’s Board of Directors initiated a share repurchase plan, allowing the company to buy back shares of its stock through open market purchases. Such buyback plans are often interpreted as a sign that the company’s leadership believes its stock is undervalued.

In related news, Director John J. Fawcett acquired 1,027 shares on July 30, 2024, at an average price of $61.79 per share, amounting to a total investment of $63,458.33. Following this transaction, Fawcett’s total holdings increased to 10,302 shares, valued at approximately $636,560.58. This acquisition reflects an 11.07% increase in his position.

Insider ownership stands at 0.85% of the company’s stock, indicating a modest level of insider investment.

Bread Financial Holdings, Inc. provides technology-driven payment and lending solutions to consumers and industries throughout North America, offering a range of financing services, including credit card programs and risk management solutions.