Bread Earnings: Results Hit by Debt Paydown Costs, but Leverage Is in a Heathier Place

No-moat-rated Bread Financial reported third-quarter results that were in line with our expectations once adjusted for one-time expenses. Net revenue decreased 5% to $983 million. GAAP diluted earnings per share decreased to $0.05 from $3.42 last year, but that includes a $91 million expense from the repurchase of convertible debt; adjusted earnings per share came in at $1.83. As we incorporate these results, we do not plan to materially alter our $48 fair value estimate. We see the shares as roughly fairly valued.