BFH
Bread Financial Holdings, Inc.
$106.27
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 89.5% below fair value
You pay
$106.27
Bear
$673.81
Fair
$1,015.13
Bull
$1,381.67
Bear
$673.81
+534.1%
8% stage 1 growth, 11% discount
Fair
$1,015.13
+855.2%
14% stage 1 growth, 11% discount
Bull
$1,381.67
+1200.2%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
2.4x
Market is pricing in (growth)
-24.1%
vs 13.5% 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 $96.25 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $1015.13 per share.
Warnings
Wall Street's average price target is $96.25 (from 37 analysts). Our estimate is 1364% 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