Alliance Data Systems (NYSE:ADS) Rating Lowered 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, January 10th.

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 research firms have also recently commented on ADS. Barclays reiterated an equal weight rating and set a $298.00 price objective (up previously from $278.00) on shares of Alliance Data Systems in a research report on Monday, January 8th. Royal Bank of Canada reiterated a buy rating and set a $293.00 price objective on shares of Alliance Data Systems in a research report on Thursday, January 4th. Robert W. Baird reissued a hold rating and set a $270.00 price target on shares of Alliance Data Systems in a report on Tuesday, January 9th. Stephens set a $304.00 price target on Alliance Data Systems and gave the company a buy rating in a report on Tuesday, January 2nd. Finally, ValuEngine raised Alliance Data Systems from a hold rating to a buy rating in a report on Saturday, October 21st. Four analysts have rated the stock with a sell rating, six have assigned a hold rating and thirteen have issued a buy rating to the company. The company currently has a consensus rating of Hold and an average target price of $276.44.

Shares of Alliance Data Systems (NYSE:ADS) traded down $11.13 during trading hours on Wednesday, reaching $238.78. The company’s stock had a trading volume of 957,107 shares, compared to its average volume of 655,113. Alliance Data Systems has a 1-year low of $209.00 and a 1-year high of $278.33. The company has a quick ratio of 2.09, a current ratio of 1.91 and a debt-to-equity ratio of 8.02. The stock has a market capitalization of $13,807.20, a PE ratio of 16.90, a price-to-earnings-growth ratio of 0.89 and a beta of 1.71.

Alliance Data Systems (NYSE:ADS) last posted its quarterly earnings results on Thursday, January 25th. The business services provider reported $6.10 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $4.72 by $1.38. The firm had revenue of $2.11 billion during the quarter, compared to analysts’ expectations of $2.15 billion. Alliance Data Systems had a return on equity of 66.17% and a net margin of 10.22%. The company’s revenue was up 15.2% on a year-over-year basis. During the same quarter in the previous year, the business earned $4.67 earnings per share. sell-side analysts predict that Alliance Data Systems will post 21.49 EPS for the current fiscal year.

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 20th. Shareholders of record on Wednesday, February 14th will be given a dividend of $0.57 per share. The ex-dividend date is Tuesday, February 13th. This is an increase from Alliance Data Systems’s previous quarterly dividend of $0.52. This represents a $2.28 dividend on an annualized basis and a yield of 0.95%. Alliance Data Systems’s dividend payout ratio is 14.72%.

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

Large investors have recently made changes to their positions in the stock. Cryder Capital Partners LLP grew its stake in Alliance Data Systems by 6.9% in the third quarter. Cryder Capital Partners LLP now owns 140,071 shares of the business services provider’s stock worth $31,033,000 after purchasing an additional 9,063 shares in the last quarter. Atlanta Capital Management Co. L L C boosted its position in Alliance Data Systems by 3.7% during the 3rd quarter. Atlanta Capital Management Co. L L C now owns 140,187 shares of the business services provider’s stock valued at $31,059,000 after acquiring an additional 4,980 shares in the last quarter. Court Place Advisors LLC boosted its position in Alliance Data Systems by 6.9% during the 3rd quarter. Court Place Advisors LLC now owns 11,013 shares of the business services provider’s stock valued at $2,440,000 after acquiring an additional 715 shares in the last quarter. Laurion Capital Management LP bought a new stake in Alliance Data Systems during the 2nd quarter valued at $4,007,000. Finally, Macquarie Group Ltd. boosted its position in Alliance Data Systems by 1,310.0% during the 2nd quarter. Macquarie Group Ltd. now owns 1,410 shares of the business services provider’s stock valued at $362,000 after acquiring an additional 1,310 shares in the last quarter. 94.82% of the stock is currently owned by institutional investors.

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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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