What Makes Bread Financial (BFH) an Attractive Stock?

2 weeks ago 8

Soumya Eswaran

Fri, December 5, 2025 astatine 8:49 AM CST 3 min read

Miller Value Partners, an concern absorption company, released its “Deep Value Strategy” third-quarter 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. The marketplace rebound that began successful April continued successful the 3rd quarter. Growth and momentum stocks continued to execute well, delivering double-digit returns, portion the marketplace began to broaden. Small and micro-cap worth stocks achieved their champion quarterly returns since Q4 2023. In the quarter, the Deep Value strategy appreciated by +26.50% compared to +6.29% instrumentality for the S&P 1500 Value Index and +11.71% instrumentality for the S&P 600 Value Index. Year-to-date, the strategy’s nett returns are +9.20% vs +9.28% and +3.17%, respectively, for the indexes. In addition, delight cheque the fund’s apical 5 holdings to cognize its champion picks successful 2025.

In its third-quarter 2025 capitalist letter, Miller Value Deep Value Strategy highlighted stocks specified arsenic Bread Financial Holdings, Inc. (NYSE:BFH). Bread Financial Holdings, Inc. (NYSE:BFH) is simply a fiscal services institution that offers tech-forward outgo and lending solutions. The one-month instrumentality for Bread Financial Holdings, Inc. (NYSE:BFH) was 13.24%, and its shares gained 13.94% implicit the past 52 weeks. On December 04, 2025, Bread Financial Holdings, Inc. (NYSE:BFH) banal closed astatine $72.00 per share, with a marketplace capitalization of $3.29 billion.

Miller Value Deep Value Strategy stated the pursuing regarding Bread Financial Holdings, Inc. (NYSE:BFH) successful its 3rd 4th 2025 capitalist letter:

"Our lone antagonistic holding during the 4th was Bread Financial Holdings, Inc. (NYSE:BFH), with a marketplace stock terms down 2%. The institution provides proprietary direct-to-consumer recognition cards and deposits on with digitally enabled private-label, co-branded recognition cards, installment loans and bargain now, wage aboriginal (“BNPL”). New absorption has completed a multi-year translation to streamline its concern model, heighten their underwriting process, make differentiated products, and grow marque partnerships. An experienced and susceptible CFO joined mates years agone and has further enhanced the equilibrium expanse and translation plan. Since, the opening of the translation program successful aboriginal 2020, superior ratios person improved by much than 3x, indebtedness reduced by $2B and accrued nonstop to user deposits by much than $6B. Marketplace caller concerns connected weaker manufacture recognition paper information look implicit discounted successful the existent stock price, arsenic Bread absorption enhanced their underwriting implicit the past mates of years and accrued their recognition reserves to 13%. With institution delinquency rates astatine fractional of reserve levels we spot the imaginable for the institution to spot a important reserve merchandise implicit the adjacent mates of years. Management looks good positioned to modulation to their semipermanent fiscal targets, which would enactment normalized ROTCE successful the Mid-20% and normalized net supra $15 per share. BFH shares stay charismatic successful our view, trading astatine much than 25% normalized net yield."