BFH
Bread Financial Holdings, Inc.
$108.41
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 77.5% below fair value
You pay
$108.41
Bear
$480.88
Fair
$480.88
Bull
$514.12
Bear
$480.88
+343.6%
3% stage 1 growth, 11% discount
Fair
$480.88
+343.6%
3% stage 1 growth, 11% discount
Bull
$514.12
+374.2%
4% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
2.4x
Market is pricing in (growth)
-23.8%
vs 3.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $114.50 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $480.88 per share.
Warnings
Wall Street's average price target is $114.50 (from 37 analysts). Our estimate is 457% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions