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Bread Financial (BFH) Soars 7.8%: Is Further Upside Left in the Stock?

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Bread Financial Holdings (BFH - Free Report) shares rallied 7.8% in the last trading session to close at $44.03. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1.9% loss over the past four weeks.

Solid credit sales and consumer spending, active risk management, strategic growth initiatives and capital deployment continue to drive the stock.

The credit sales performance is expected to improve on the back of solid consumer spending. With the continued growth of credit sales, average loans are likely to increase. With new partner additions and holiday spending, BFH continues to expect strong credit sales.

Credit metrics should remain strong with delinquency and net loss rates remaining below the historical averages. Given disciplined, proactive risk management and strong consumer payment behavior, net loss rates are expected to remain low.

BFH is prudently investing in strategic growth areas and ramping up marketing spending in growth verticals and digital innovation and technology enhancements.

This manager of loyalty and rewards programs for retailers and others is expected to post quarterly earnings of $1.50 per share in its upcoming report, which represents a year-over-year change of +18.1%. Revenues are expected to be $910.98 million, down 4.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Bread Financial, the consensus EPS estimate for the quarter has been revised 3.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on BFH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Bread Financial is part of the Zacks Financial Transaction Services industry. RB Global (RBA - Free Report) , another stock in the same industry, closed the last trading session 2.4% lower at $78.19. RBA has returned 5.3% in the past month.

For RB Global, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.90. This represents a change of +5.9% from what the company reported a year ago. RB Global currently has a Zacks Rank of #1 (Strong Buy).


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