Bread Financial Holdings, Inc.

BFH

Financial ServicesFinancial - Credit ServicesNYSE

$87.34

Market Cap: $3.53B

Bread Financial Holdings, Inc. (BFH) Valuation Summary

Updated May 9, 2026 08:59

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$80.98 – $235.26	$131.26	+50.3%
Growth Exit 10Y	$132.81 – $339.83	$200.78	+129.9%
EBITDA Exit 5Y	$70.02 – $288.69	$170.27	+94.9%
EBITDA Exit 10Y	$106.07 – $331.81	$202.28	+131.6%
▸ Trading Multiples
P/E	$119.38 – $170.08	$127.81	+46.3%
EV/EBITDA	$77.84 – $129.70	$105.53	+20.8%
EV/Revenue	$39.50 – $320.98	$229.53	+162.8%
▸ PEG
PEG Fair Value	$108.75 – $108.75	$108.75	+24.5%
▸ Earnings Power Value
Earnings Power Value	$197.50 – $264.60	$226.51	+159.3%
▸ Dividend Discount
Dividend Discount	$14.17 – $32.10	$20.26	-76.8%

Valuation History

DCF Analysis

Fair Value

$131.26

Market Price

$87.34

Upside / Downside

+50.3%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bread Financial Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -15.8% to 9.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 360, DPO 64, DIO 60). At a 11.1% WACC with mid-year discounting, the terminal value (100% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $131.26 per share, suggesting BFH is undervalued by 50.3% at the current price of $87.34.

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	645	671	692	758	830	851
(−) Net Interest	620	645	665	729	798	818
(+) D&A	30	30	33	51	70	72
EBITDA	1,295	1,345	1,391	1,537	1,697	1,740

(−) Tax	148	154	159	174	190	195
(−) CapEx	82	85	88	96	105	108
(−) ΔWC	4,022	154	131	395	433	444
Free Cash Flow (FCFF)	-2,956	952	1,014	872	970	994

Terminal Value						11,561
WACC / Discount Rate	11.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-2,805	813	780	604	604	6,831

Enterprise Value	6,827
Projection Period	-4	-0.1%
Terminal Value	6,831	100.1%

(−) Current Net Debt	789

Equity Value	6,038
(/) Outstanding Shares	46

Fair Price	$131.26

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
9.1%	$169	$182	$197	$215	$235
10.1%	$139	$149	$160	$172	$187
11.1%	$116	$123	$131	$140	$151
12.1%	$97	$102	$109	$116	$123
13.1%	$81	$86	$90	$96	$102

Current price: $87.34. Green = undervalued, Red = overvalued.

Fair Value

$200.78

Market Price

$87.34

Upside / Downside

+129.9%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bread Financial Holdings, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -15.8% to 4.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 360, DPO 64, DIO 60). At a 11.1% WACC with mid-year discounting, the terminal value (69% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $200.78 per share, suggesting BFH is undervalued by 129.9% at the current price of $87.34.

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	645	671	692	758	830	900	965	1,026	1,079	1,123	1,151
(−) Net Interest	620	645	665	729	798	865	928	986	1,037	1,079	1,106
(+) D&A	30	30	33	51	70	91	97	105	113	121	124
EBITDA	1,295	1,345	1,391	1,537	1,697	1,855	1,991	2,117	2,229	2,323	2,381

(−) Tax	148	154	159	174	190	206	221	235	247	257	264
(−) CapEx	82	85	88	96	105	114	122	130	136	142	145
(−) ΔWC	4,022	154	131	395	433	420	397	363	319	265	272
Free Cash Flow (FCFF)	-2,956	952	1,014	872	970	1,116	1,251	1,389	1,527	1,659	1,701

Terminal Value											19,783
WACC / Discount Rate	11.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-2,805	813	780	604	604	625	631	631	624	611	6,907

Enterprise Value	10,025
Projection Period	3,118	31.1%
Terminal Value	6,907	68.9%

(−) Current Net Debt	789

Equity Value	9,236
(/) Outstanding Shares	46

Fair Price	$200.78

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
9.1%	$267	$281	$298	$317	$340
10.1%	$221	$231	$243	$256	$271
11.1%	$185	$193	$201	$210	$221
12.1%	$156	$162	$168	$175	$182
13.1%	$133	$137	$142	$147	$152

Current price: $87.34. Green = undervalued, Red = overvalued.

Fair Value

$170.27

Market Price

$87.34

Upside / Downside

+94.9%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bread Financial Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -15.8% to 9.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 360, DPO 64, DIO 60). At a 11.1% WACC with mid-year discounting, the terminal value (100% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $170.27 per share, suggesting BFH is undervalued by 94.9% at the current price of $87.34.

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

EV/EBITDA Exit Multiple

8.39x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	645	671	692	758	830	851
(−) Net Interest	620	645	665	729	798	818
(+) D&A	30	30	33	51	70	72
EBITDA	1,295	1,345	1,391	1,537	1,697	1,740

(−) Tax	148	154	159	174	190	—
(−) CapEx	82	85	88	96	105	—
(−) ΔWC	4,022	154	131	395	433	—
Free Cash Flow (FCF)	-2,956	952	1,014	872	970	—

Peers' EBITDA Multiple						8.4x
Terminal Value						14,598
WACC / Discount Rate	11.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-2,805	813	780	604	604	8,626

Enterprise Value	8,621
Projection Period	-4	-0.0%
Terminal Value	8,626	100.0%

(−) Current Net Debt	789
Equity Value	7,832
(÷) Outstanding Shares	46M
Fair Price	$170	+94.9%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	4.4x	6.4x	8.4x	10.4x	12.4x
9.1%	$93	$142	$191	$240	$289
10.1%	$87	$133	$180	$227	$274
11.1%	$81	$126	$170	$215	$260
12.1%	$75	$118	$161	$204	$246
13.1%	$70	$111	$152	$193	$234

Current price: $87.34. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$202.28

Market Price

$87.34

Upside / Downside

+131.6%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bread Financial Holdings, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -15.8% to 4.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 360, DPO 64, DIO 60). At a 11.1% WACC with mid-year discounting, the terminal value (69% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $202.28 per share, suggesting BFH is undervalued by 131.6% at the current price of $87.34.

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

EV/EBITDA Exit Multiple

8.39x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	645	671	692	758	830	900	965	1,026	1,079	1,123	1,151
(−) Net Interest	620	645	665	729	798	865	928	986	1,037	1,079	1,106
(+) D&A	30	30	33	51	70	91	97	105	113	121	124
EBITDA	1,295	1,345	1,391	1,537	1,697	1,855	1,991	2,117	2,229	2,323	2,381

(−) Tax	148	154	159	174	190	206	221	235	247	257	—
(−) CapEx	82	85	88	96	105	114	122	130	136	142	—
(−) ΔWC	4,022	154	131	395	433	420	397	363	319	265	—
Free Cash Flow (FCF)	-2,956	952	1,014	872	970	1,116	1,251	1,389	1,527	1,659	—

Peers' EBITDA Multiple											8.4x
Terminal Value											19,980
WACC / Discount Rate	11.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-2,805	813	780	604	604	625	631	631	624	611	6,976

Enterprise Value	10,094
Projection Period	3,118	30.9%
Terminal Value	6,976	69.1%

(−) Current Net Debt	789
Equity Value	9,305
(÷) Outstanding Shares	46M
Fair Price	$202	+131.6%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	4.4x	6.4x	8.4x	10.4x	12.4x
9.1%	$158	$202	$245	$288	$332
10.1%	$144	$183	$223	$262	$302
11.1%	$130	$166	$202	$238	$275
12.1%	$118	$151	$184	$217	$250
13.1%	$106	$136	$167	$197	$227

Current price: $87.34. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$127.81

Market Price

$87.34

Upside / Downside

+46.3%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Bread Financial Holdings, Inc. (BFH) has a fair value of $127.81 based on 9 comparable companies in the Financial - Credit Services industry.

P/E Valuation — Financial - Credit Services

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Bread Financial Holdings, Inc.BFH	4,018	8.0x	12.6x
Enova International, Inc.ENVA	4,352	15.1x	19.8x
WSFS Financial CorporationWSFS	3,762	14.2x	15.9x
Brighthouse Financial, Inc.BHF	3,510	10.6x	2.1x
WesBanco, Inc.WSBC	3,289	15.1x	16.1x
eToro Group Ltd.ETOR	3,205	16.9x	17.0x
NMI Holdings, Inc.NMIH	2,953	7.9x	8.5x
The Western Union CompanyWU	2,821	5.9x	5.1x
The Bancorp, Inc.TBBK	2,511	12.1x	15.4x
Kemper CorporationKMPR	1,783	13.2x	5.6x
Industry Median		13.2x	15.4x
(*) Profit after tax		518	319
Equity Value		6,852	4,907
(/) Outstanding shares		46	46
Fair Price		$149	$107

Selected Fair Value (avg of trailing + forward)

$127.81

+46.3%

Fair Value

$105.53

Market Price

$87.34

Upside / Downside

+20.8%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Bread Financial Holdings, Inc. (BFH) has a fair value of $105.53 based on 9 comparable companies in the Financial - Credit Services industry.

EV/EBITDA Valuation — Financial - Credit Services

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Bread Financial Holdings, Inc.BFH	4,018	6.9x	8.4x
Enova International, Inc.ENVA	4,352	16.7x	19.8x
WSFS Financial CorporationWSFS	3,762	6.7x	9.5x
Brighthouse Financial, Inc.BHF	3,510	2.0x	1.5x
WesBanco, Inc.WSBC	3,289	15.3x	38.9x
eToro Group Ltd.ETOR	3,205	8.4x	8.8x
NMI Holdings, Inc.NMIH	2,953	6.3x	7.8x
The Western Union CompanyWU	2,821	1.7x	1.6x
The Bancorp, Inc.TBBK	2,511	8.6x	12.9x
Kemper CorporationKMPR	1,783	9.7x	10.3x
Industry Median		8.4x	9.5x
(*) EBITDA		694	575
= Enterprise Value		5,823	5,464
(-) Net Debt		789	789
Equity Value		5,034	4,675
(/) Outstanding shares		46	46
Fair Price		$109	$102

Selected Fair Value (avg of trailing + forward)

$105.53

+20.8%

Fair Value

$229.53

Market Price

$87.34

Upside / Downside

+162.8%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Bread Financial Holdings, Inc. (BFH) has a fair value of $229.53 based on 9 comparable companies in the Financial - Credit Services industry.

EV/Revenue Valuation — Financial - Credit Services

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Bread Financial Holdings, Inc.BFH	4,018	1.0x	1.2x
Enova International, Inc.ENVA	4,352	2.8x	3.3x
WSFS Financial CorporationWSFS	3,762	2.0x	2.9x
Brighthouse Financial, Inc.BHF	3,510	0.2x	0.1x
WesBanco, Inc.WSBC	3,289	3.3x	8.4x
eToro Group Ltd.ETOR	3,205	2.5x	2.6x
NMI Holdings, Inc.NMIH	2,953	4.7x	5.9x
The Western Union CompanyWU	2,821	0.4x	0.4x
The Bancorp, Inc.TBBK	2,511	3.8x	5.7x
Kemper CorporationKMPR	1,783	0.6x	0.6x
Industry Median		2.5x	2.9x
(*) Revenue		4,699	3,890
= Enterprise Value		11,592	11,103
(-) Net Debt		789	789
Equity Value		10,803	10,314
(/) Outstanding shares		46	46
Fair Price		$235	$224

Selected Fair Value (avg of trailing + forward)

$229.53

+162.8%

PEG Fair Value

Fair Value

$108.75

Market Price

$87.34

Upside / Downside

+24.5%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 9.9% plus 1.2% dividend yield, the company has a fair value of $108.75 based on NTM EPS (FY2026) of $11.01. The current PEG ratio is 0.80.

PEG Ratio

0.80Undervalued

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 7.9 ÷ (8.7% + 1.2%) = 0.80

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: StalwartPEG highly applicable

PEG works well for steady growers with predictable earnings.

Fair Value Calculation

EPS Growth RateForward	8.7%
Dividend Yield	+1.2%
Adjusted Growth (clamped 8–25%)	9.9%
Fair P/E	9.9x
NTM EPS (FY2026)	$11.01
Fair Value	$108.75

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$10.96	—	—
FY2026E	$11.01	+0.5%	11
FY2027E	$12.56	+14.1%	11
FY2028E	$14.07	+12.0%	5

3Y Forward EPS CAGR: 8.7%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$801.0M	$16.02	—
FY2022	$223.0M	$4.46	-72.2%
FY2023	$718.0M	$14.36	+222.0%
FY2024	$277.0M	$5.50	-61.7%
FY2025	$518.0M	$10.96	+99.3%

4Y Historical EPS CAGR: -9.1%

Earnings Power Value

Fair Value

$226.51

Market Price

$87.34

Upside / Downside

+159.3%

Verdict

Undervalued

Using the Earnings Power Value framework with a WACC of 11.1% and normalized earnings of $1.2B, the company has a fair value of $226.51 per share. The EPV range is $197.50 – $264.60 based on WACC sensitivity (9.6% – 12.6%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,244	1,244	1,244
(/) WACC	12.6%	11.1%	9.6%
Enterprise Value	9,874	11,209	12,961
(-) Net debt	789	789	789
Equity Value	9,085	10,420	12,172
(/) Outstanding shares	46	46	46
Fair Price	$197.50	$226.51	$264.60

Dividend Discount Model

Fair Value

$20.26

Market Price

$87.34

Upside / Downside

-76.8%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 9.0% and projected dividend growth of 10.7%, the fair value is $20.26 per share. The DDM range is $14.17 – $32.10 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.91

Dividend Yield

1.19%

Payout Ratio

8.1%

Dividend Coverage

12.33x

FCF Payout Ratio2.0%

DPS CAGR (4Y)2.1%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.91	8.1%	+7.0%
2024	$0.85	15.5%	+1.6%
2023	$0.84	5.8%	-2.3%
2022	$0.86	19.3%	+2.4%
2021	$0.84	5.2%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$1.01	10.7%	0.9171	$0.93
2027	$1.12	10.7%	0.8411	$0.94
2028	$1.24	10.7%	0.7714	$0.96
2029	$1.37	10.7%	0.7075	$0.97
2030	$1.52	10.7%	0.6489	$0.99
Terminal Value	$1.56 DPS	2.5%		$15.47

PV of Projected Dividends$4.78

PV of Terminal Value$15.47

Fair Value per Share$20.26

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	8.7%	9.7%	10.7%	11.7%	12.7%
7.0%	$27	$28	$30	$31	$32
8.0%	$22	$23	$24	$25	$26
9.0%	$19	$19	$20	$21	$22
10.0%	$16	$17	$17	$18	$19
11.0%	$14	$15	$15	$16	$17

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Bread Financial Holdings, Inc. (BFH) Valuation Summary

Updated May 9, 2026 08:59

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$80.98 – $235.26	$131.26	+50.3%
Growth Exit 10Y	$132.81 – $339.83	$200.78	+129.9%
EBITDA Exit 5Y	$70.02 – $288.69	$170.27	+94.9%
EBITDA Exit 10Y	$106.07 – $331.81	$202.28	+131.6%
▸ Trading Multiples
P/E	$119.38 – $170.08	$127.81	+46.3%
EV/EBITDA	$77.84 – $129.70	$105.53	+20.8%
EV/Revenue	$39.50 – $320.98	$229.53	+162.8%
▸ PEG
PEG Fair Value	$108.75 – $108.75	$108.75	+24.5%
▸ Earnings Power Value
Earnings Power Value	$197.50 – $264.60	$226.51	+159.3%
▸ Dividend Discount
Dividend Discount	$14.17 – $32.10	$20.26	-76.8%

Valuation History

DCF Analysis

Fair Value

$131.26

Market Price

$87.34

Upside / Downside

+50.3%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	645	671	692	758	830	851
(−) Net Interest	620	645	665	729	798	818
(+) D&A	30	30	33	51	70	72
EBITDA	1,295	1,345	1,391	1,537	1,697	1,740

(−) Tax	148	154	159	174	190	195
(−) CapEx	82	85	88	96	105	108
(−) ΔWC	4,022	154	131	395	433	444
Free Cash Flow (FCFF)	-2,956	952	1,014	872	970	994

Terminal Value						11,561
WACC / Discount Rate	11.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-2,805	813	780	604	604	6,831

Enterprise Value	6,827
Projection Period	-4	-0.1%
Terminal Value	6,831	100.1%

(−) Current Net Debt	789

Equity Value	6,038
(/) Outstanding Shares	46

Fair Price	$131.26

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
9.1%	$169	$182	$197	$215	$235
10.1%	$139	$149	$160	$172	$187
11.1%	$116	$123	$131	$140	$151
12.1%	$97	$102	$109	$116	$123
13.1%	$81	$86	$90	$96	$102

Current price: $87.34. Green = undervalued, Red = overvalued.

Fair Value

$200.78

Market Price

$87.34

Upside / Downside

+129.9%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	645	671	692	758	830	900	965	1,026	1,079	1,123	1,151
(−) Net Interest	620	645	665	729	798	865	928	986	1,037	1,079	1,106
(+) D&A	30	30	33	51	70	91	97	105	113	121	124
EBITDA	1,295	1,345	1,391	1,537	1,697	1,855	1,991	2,117	2,229	2,323	2,381

(−) Tax	148	154	159	174	190	206	221	235	247	257	264
(−) CapEx	82	85	88	96	105	114	122	130	136	142	145
(−) ΔWC	4,022	154	131	395	433	420	397	363	319	265	272
Free Cash Flow (FCFF)	-2,956	952	1,014	872	970	1,116	1,251	1,389	1,527	1,659	1,701

Terminal Value											19,783
WACC / Discount Rate	11.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-2,805	813	780	604	604	625	631	631	624	611	6,907

Enterprise Value	10,025
Projection Period	3,118	31.1%
Terminal Value	6,907	68.9%

(−) Current Net Debt	789

Equity Value	9,236
(/) Outstanding Shares	46

Fair Price	$200.78

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
9.1%	$267	$281	$298	$317	$340
10.1%	$221	$231	$243	$256	$271
11.1%	$185	$193	$201	$210	$221
12.1%	$156	$162	$168	$175	$182
13.1%	$133	$137	$142	$147	$152

Current price: $87.34. Green = undervalued, Red = overvalued.

Fair Value

$170.27

Market Price

$87.34

Upside / Downside

+94.9%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bread Financial Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -15.8% to 9.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 360, DPO 64, DIO 60). At a 11.1% WACC with mid-year discounting, the terminal value (100% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $170.27 per share, suggesting BFH is undervalued by 94.9% at the current price of $87.34.

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

EV/EBITDA Exit Multiple

8.39x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	645	671	692	758	830	851
(−) Net Interest	620	645	665	729	798	818
(+) D&A	30	30	33	51	70	72
EBITDA	1,295	1,345	1,391	1,537	1,697	1,740

(−) Tax	148	154	159	174	190	—
(−) CapEx	82	85	88	96	105	—
(−) ΔWC	4,022	154	131	395	433	—
Free Cash Flow (FCF)	-2,956	952	1,014	872	970	—

Peers' EBITDA Multiple						8.4x
Terminal Value						14,598
WACC / Discount Rate	11.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-2,805	813	780	604	604	8,626

Enterprise Value	8,621
Projection Period	-4	-0.0%
Terminal Value	8,626	100.0%

(−) Current Net Debt	789
Equity Value	7,832
(÷) Outstanding Shares	46M
Fair Price	$170	+94.9%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	4.4x	6.4x	8.4x	10.4x	12.4x
9.1%	$93	$142	$191	$240	$289
10.1%	$87	$133	$180	$227	$274
11.1%	$81	$126	$170	$215	$260
12.1%	$75	$118	$161	$204	$246
13.1%	$70	$111	$152	$193	$234

Current price: $87.34. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$202.28

Market Price

$87.34

Upside / Downside

+131.6%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bread Financial Holdings, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -15.8% to 4.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 360, DPO 64, DIO 60). At a 11.1% WACC with mid-year discounting, the terminal value (69% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $202.28 per share, suggesting BFH is undervalued by 131.6% at the current price of $87.34.

FCFF Present Value Calculation

WACC

11.10%

3% – 20%

EV/EBITDA Exit Multiple

8.39x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	645	671	692	758	830	900	965	1,026	1,079	1,123	1,151
(−) Net Interest	620	645	665	729	798	865	928	986	1,037	1,079	1,106
(+) D&A	30	30	33	51	70	91	97	105	113	121	124
EBITDA	1,295	1,345	1,391	1,537	1,697	1,855	1,991	2,117	2,229	2,323	2,381

(−) Tax	148	154	159	174	190	206	221	235	247	257	—
(−) CapEx	82	85	88	96	105	114	122	130	136	142	—
(−) ΔWC	4,022	154	131	395	433	420	397	363	319	265	—
Free Cash Flow (FCF)	-2,956	952	1,014	872	970	1,116	1,251	1,389	1,527	1,659	—

Peers' EBITDA Multiple											8.4x
Terminal Value											19,980
WACC / Discount Rate	11.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-2,805	813	780	604	604	625	631	631	624	611	6,976

Enterprise Value	10,094
Projection Period	3,118	30.9%
Terminal Value	6,976	69.1%

(−) Current Net Debt	789
Equity Value	9,305
(÷) Outstanding Shares	46M
Fair Price	$202	+131.6%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	4.4x	6.4x	8.4x	10.4x	12.4x
9.1%	$158	$202	$245	$288	$332
10.1%	$144	$183	$223	$262	$302
11.1%	$130	$166	$202	$238	$275
12.1%	$118	$151	$184	$217	$250
13.1%	$106	$136	$167	$197	$227

Current price: $87.34. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$127.81

Market Price

$87.34

Upside / Downside

+46.3%

Verdict

Undervalued

P/E Valuation — Financial - Credit Services

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Bread Financial Holdings, Inc.BFH	4,018	8.0x	12.6x
Enova International, Inc.ENVA	4,352	15.1x	19.8x
WSFS Financial CorporationWSFS	3,762	14.2x	15.9x
Brighthouse Financial, Inc.BHF	3,510	10.6x	2.1x
WesBanco, Inc.WSBC	3,289	15.1x	16.1x
eToro Group Ltd.ETOR	3,205	16.9x	17.0x
NMI Holdings, Inc.NMIH	2,953	7.9x	8.5x
The Western Union CompanyWU	2,821	5.9x	5.1x
The Bancorp, Inc.TBBK	2,511	12.1x	15.4x
Kemper CorporationKMPR	1,783	13.2x	5.6x
Industry Median		13.2x	15.4x
(*) Profit after tax		518	319
Equity Value		6,852	4,907
(/) Outstanding shares		46	46
Fair Price		$149	$107

Selected Fair Value (avg of trailing + forward)

$127.81

+46.3%

Fair Value

$105.53

Market Price

$87.34

Upside / Downside

+20.8%

Verdict

Undervalued

EV/EBITDA Valuation — Financial - Credit Services

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Bread Financial Holdings, Inc.BFH	4,018	6.9x	8.4x
Enova International, Inc.ENVA	4,352	16.7x	19.8x
WSFS Financial CorporationWSFS	3,762	6.7x	9.5x
Brighthouse Financial, Inc.BHF	3,510	2.0x	1.5x
WesBanco, Inc.WSBC	3,289	15.3x	38.9x
eToro Group Ltd.ETOR	3,205	8.4x	8.8x
NMI Holdings, Inc.NMIH	2,953	6.3x	7.8x
The Western Union CompanyWU	2,821	1.7x	1.6x
The Bancorp, Inc.TBBK	2,511	8.6x	12.9x
Kemper CorporationKMPR	1,783	9.7x	10.3x
Industry Median		8.4x	9.5x
(*) EBITDA		694	575
= Enterprise Value		5,823	5,464
(-) Net Debt		789	789
Equity Value		5,034	4,675
(/) Outstanding shares		46	46
Fair Price		$109	$102

Selected Fair Value (avg of trailing + forward)

$105.53

+20.8%

Fair Value

$229.53

Market Price

$87.34

Upside / Downside

+162.8%

Verdict

Undervalued

EV/Revenue Valuation — Financial - Credit Services

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Bread Financial Holdings, Inc.BFH	4,018	1.0x	1.2x
Enova International, Inc.ENVA	4,352	2.8x	3.3x
WSFS Financial CorporationWSFS	3,762	2.0x	2.9x
Brighthouse Financial, Inc.BHF	3,510	0.2x	0.1x
WesBanco, Inc.WSBC	3,289	3.3x	8.4x
eToro Group Ltd.ETOR	3,205	2.5x	2.6x
NMI Holdings, Inc.NMIH	2,953	4.7x	5.9x
The Western Union CompanyWU	2,821	0.4x	0.4x
The Bancorp, Inc.TBBK	2,511	3.8x	5.7x
Kemper CorporationKMPR	1,783	0.6x	0.6x
Industry Median		2.5x	2.9x
(*) Revenue		4,699	3,890
= Enterprise Value		11,592	11,103
(-) Net Debt		789	789
Equity Value		10,803	10,314
(/) Outstanding shares		46	46
Fair Price		$235	$224

Selected Fair Value (avg of trailing + forward)

$229.53

+162.8%

PEG Fair Value

Fair Value

$108.75

Market Price

$87.34

Upside / Downside

+24.5%

Verdict

Undervalued

PEG Ratio

0.80Undervalued

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 7.9 ÷ (8.7% + 1.2%) = 0.80

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: StalwartPEG highly applicable

PEG works well for steady growers with predictable earnings.

Fair Value Calculation

EPS Growth RateForward	8.7%
Dividend Yield	+1.2%
Adjusted Growth (clamped 8–25%)	9.9%
Fair P/E	9.9x
NTM EPS (FY2026)	$11.01
Fair Value	$108.75

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$10.96	—	—
FY2026E	$11.01	+0.5%	11
FY2027E	$12.56	+14.1%	11
FY2028E	$14.07	+12.0%	5

3Y Forward EPS CAGR: 8.7%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$801.0M	$16.02	—
FY2022	$223.0M	$4.46	-72.2%
FY2023	$718.0M	$14.36	+222.0%
FY2024	$277.0M	$5.50	-61.7%
FY2025	$518.0M	$10.96	+99.3%

4Y Historical EPS CAGR: -9.1%

Earnings Power Value

Fair Value

$226.51

Market Price

$87.34

Upside / Downside

+159.3%

Verdict

Undervalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,244	1,244	1,244
(/) WACC	12.6%	11.1%	9.6%
Enterprise Value	9,874	11,209	12,961
(-) Net debt	789	789	789
Equity Value	9,085	10,420	12,172
(/) Outstanding shares	46	46	46
Fair Price	$197.50	$226.51	$264.60

Dividend Discount Model

Fair Value

$20.26

Market Price

$87.34

Upside / Downside

-76.8%

Verdict

Overvalued

Dividend Profile

Current DPS

$0.91

Dividend Yield

1.19%

Payout Ratio

8.1%

Dividend Coverage

12.33x

FCF Payout Ratio2.0%

DPS CAGR (4Y)2.1%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.91	8.1%	+7.0%
2024	$0.85	15.5%	+1.6%
2023	$0.84	5.8%	-2.3%
2022	$0.86	19.3%	+2.4%
2021	$0.84	5.2%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$1.01	10.7%	0.9171	$0.93
2027	$1.12	10.7%	0.8411	$0.94
2028	$1.24	10.7%	0.7714	$0.96
2029	$1.37	10.7%	0.7075	$0.97
2030	$1.52	10.7%	0.6489	$0.99
Terminal Value	$1.56 DPS	2.5%		$15.47

PV of Projected Dividends$4.78

PV of Terminal Value$15.47

Fair Value per Share$20.26

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	8.7%	9.7%	10.7%	11.7%	12.7%
7.0%	$27	$28	$30	$31	$32
8.0%	$22	$23	$24	$25	$26
9.0%	$19	$19	$20	$21	$22
10.0%	$16	$17	$17	$18	$19
11.0%	$14	$15	$15	$16	$17