Alliance Data Systems (ADS) Cut to “Hold” at Zacks Investment Research

Zacks Investment Research cut shares of Alliance Data Systems (NYSE:ADS) from a buy rating to a hold rating in a report released on Wednesday.

According to Zacks, “Alliance Data remains well-positioned for growth from significant opportunities owing to the current trend in consumer-based businesses, shifting their marketing spends to data-driven marketing strategies. It has made several strategic acquisitions to grow inorganically. Solid receivables growth in Card Services along with strength in LoyaltyOne and Epsilon segments should continue to drive top-line growth. For 2017, core EPS is expected at $18.10 on $7.8 billion revenues and for 2018, core EPS is projected at $21.50 on revenues of $8.7 billion. However, increasing expenses and dependence on limited clients for revenues, raise concerns. Shares of Alliance Data have underperformed the industry in a year. It is set to release fourth quarter results on Jan 25. A Zacks Rank #3 increases the predictive power of a beat, but combined with the Earnings ESP of -0.94%, makes prediction difficult.”

A number of other equities research analysts have also weighed in on the stock. Robert W. Baird reiterated a hold rating and set a $270.00 target price on shares of Alliance Data Systems in a research note on Tuesday, January 9th. Barclays reiterated an equal weight rating and set a $298.00 target price (up from $278.00) on shares of Alliance Data Systems in a research note on Monday, January 8th. Royal Bank of Canada reiterated a buy rating and set a $293.00 target price on shares of Alliance Data Systems in a research note on Thursday, January 4th. Stephens set a $304.00 target price on shares of Alliance Data Systems and gave the company a buy rating in a research note on Tuesday, January 2nd. Finally, BMO Capital Markets reiterated a hold rating and set a $235.00 target price on shares of Alliance Data Systems in a research note on Wednesday, November 22nd. Four equities research analysts have rated the stock with a sell rating, nine have issued a hold rating and ten have assigned a buy rating to the stock. The stock currently has a consensus rating of Hold and a consensus target price of $266.76.

Shares of Alliance Data Systems (NYSE ADS) opened at $276.37 on Wednesday. The firm has a market cap of $15,269.17, a price-to-earnings ratio of 16.42, a price-to-earnings-growth ratio of 0.99 and a beta of 1.79. The company has a debt-to-equity ratio of 9.53, a quick ratio of 2.09 and a current ratio of 2.11. Alliance Data Systems has a 12 month low of $209.00 and a 12 month high of $278.33.

Alliance Data Systems (NYSE:ADS) last announced its earnings results on Thursday, October 19th. The business services provider reported $5.35 earnings per share for the quarter, beating analysts’ consensus estimates of $4.80 by $0.55. The business had revenue of $1.91 billion during the quarter, compared to analyst estimates of $1.97 billion. Alliance Data Systems had a net margin of 7.09% and a return on equity of 62.95%. The company’s quarterly revenue was up 1.4% compared to the same quarter last year. During the same period in the previous year, the business earned $4.74 EPS. equities research analysts predict that Alliance Data Systems will post 17.08 earnings per share for the current year.

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, December 19th. Stockholders of record on Tuesday, November 14th were paid a $0.52 dividend. The ex-dividend date was Monday, November 13th. This represents a $2.08 annualized dividend and a dividend yield of 0.75%. Alliance Data Systems’s dividend payout ratio (DPR) is 22.06%.

In other news, CFO Charles L. Horn sold 2,128 shares of the company’s stock in a transaction on Thursday, November 30th. The stock was sold at an average price of $235.00, for a total value of $500,080.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Corporate insiders own 2.60% of the company’s stock.

Several large investors have recently bought and sold shares of ADS. Oppenheimer & Co. Inc. increased its stake in shares of Alliance Data Systems by 42.9% in the 2nd quarter. Oppenheimer & Co. Inc. now owns 1,822 shares of the business services provider’s stock worth $468,000 after purchasing an additional 547 shares in the last quarter. Fiduciary Trust Co. bought a new position in Alliance Data Systems in the 2nd quarter worth $108,000. Schroder Investment Management Group boosted its holdings in Alliance Data Systems by 669.8% in the 2nd quarter. Schroder Investment Management Group now owns 76,873 shares of the business services provider’s stock worth $19,842,000 after buying an additional 66,887 shares during the period. Tredje AP fonden boosted its holdings in Alliance Data Systems by 13.5% in the 2nd quarter. Tredje AP fonden now owns 3,700 shares of the business services provider’s stock worth $950,000 after buying an additional 440 shares during the period. Finally, Engineers Gate Manager LP bought a new position in Alliance Data Systems in the 2nd quarter worth $1,107,000. Hedge funds and other institutional investors own 94.57% of the company’s stock.

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Alliance Data Systems Company Profile

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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