Published On: Wed, Sep 21st, 2016

Zacks Investment Research Lowers Alliance Data Systems Corp. (ADS) to Sell

Alliance Data Systems Corp. (NYSE:ADS) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued to investors on Wednesday.
According to Zacks, “Alliance Data’s margin contraction from increasing expenses and dependence on limited clients for revenues are concerns. Though adverse forex were a drag, the company does not expect any forex impact drag in the second half of 2016. Absence of any near term catalysts there were no earnings momentum over the last few weeks. Nonetheless, Alliance Data’s inorganic story seems impressive on strategic buyouts and is banking heavily on the Conversant buyout that has started reaping results. It intends to deploy capital on mergers and acquisitions as well as buybacks in 2016. It has been strengthening its balance sheet with financial flexibility to capitalize on strategic opportunities. The company expects top- and bottom-line growth to gain pace as the year advances with lower yield compression at Card Services, lower loss rates and better performance at Epsilon. All of these factors cushioned the company to raise its 2016 guidance.”
Several other brokerages also recently issued reports on ADS. Deutsche Bank AG reiterated a “buy” rating and issued a $246.00 price objective on shares of Alliance Data Systems Corp. in a research report on Thursday, September 1st. William Blair reiterated an “outperform” rating on shares of Alliance Data Systems Corp. in a research report on Tuesday, July 12th. Jefferies Group lifted their price objective on Alliance Data Systems Corp. from $240.00 to $265.00 and gave the company a “buy” rating in a research report on Monday, July 25th. BMO Capital Markets downgraded Alliance Data Systems Corp. from an “outperform” rating to a “market perform” rating and set a $235.00 price objective for the company. in a research report on Friday, July 22nd. They noted that the move was a valuation call. Finally, Vetr upgraded Alliance Data Systems Corp. from a “buy” rating to a “strong-buy” rating and set a $248.36 price objective for the company in a research report on Monday, June 13th. Two analysts have rated the stock with a sell rating, seven have given a hold rating, fifteen have given a buy rating and one has given a strong buy rating to the company. The stock currently has an average rating of “Buy” and a consensus target price of $271.02.

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Alliance Data Systems Corp. (NYSE:ADS) traded up 0.88% during trading on Wednesday, hitting $215.63. The company had a trading volume of 471,862 shares. The company has a market capitalization of $12.62 billion, a price-to-earnings ratio of 26.84 and a beta of 1.40. Alliance Data Systems Corp. has a 12-month low of $176.63 and a 12-month high of $303.75. The firm has a 50-day moving average of $211.48 and a 200 day moving average of $210.79.
Alliance Data Systems Corp. (NYSE:ADS) last announced its quarterly earnings results on Thursday, July 21st. The company reported $3.68 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $3.59 by $0.09. The business had revenue of $1.75 billion for the quarter, compared to analyst estimates of $1.64 billion. Alliance Data Systems Corp. had a return on equity of 47.99% and a net margin of 8.85%. Alliance Data Systems Corp.’s quarterly revenue was up 16.5% on a year-over-year basis. During the same quarter in the previous year, the firm earned $3.32 EPS. On average, equities research analysts forecast that Alliance Data Systems Corp. will post $16.85 earnings per share for the current year.
Several hedge funds and other institutional investors have recently bought and sold shares of the company. Norges Bank purchased a new position in Alliance Data Systems Corp. during the fourth quarter valued at $127,255,000. Fjarde AP Fonden Fourth Swedish National Pension Fund raised its stake in Alliance Data Systems Corp. by 13.5% in the first quarter. Fjarde AP Fonden Fourth Swedish National Pension Fund now owns 13,954 shares of the company’s stock valued at $3,070,000 after buying an additional 1,655 shares during the last quarter. Exxonmobil Investment Management Inc. TX raised its stake in Alliance Data Systems Corp. by 5.3% in the first quarter. Exxonmobil Investment Management Inc. TX now owns 14,429 shares of the company’s stock valued at $3,174,000 after buying an additional 725 shares during the last quarter. Commonwealth Equity Services Inc raised its stake in Alliance Data Systems Corp. by 38.1% in the first quarter. Commonwealth Equity Services Inc now owns 1,525 shares of the company’s stock valued at $336,000 after buying an additional 421 shares during the last quarter. Finally, Cryder Capital Partners LLP raised its stake in Alliance Data Systems Corp. by 45.7% in the first quarter. Cryder Capital Partners LLP now owns 78,422 shares of the company’s stock valued at $17,253,000 after buying an additional 24,597 shares during the last quarter. 91.31% of the stock is owned by institutional investors.
About Alliance Data Systems Corp.
Alliance Data Systems Corporation is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs.

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