Zacks Investment Research cut shares of Alliance Data Systems (NYSE:ADS) from a hold rating to a sell rating in a research report report published on Wednesday morning.
According to Zacks, “Shares of Alliance Data have underperformed the industry in a year's time. The company has also seen its estimates for current year have been revised down in the last 30 days. Increasing operating expenses, increasing debt level and dependence on limited clients for revenues are concerns. Nonetheless, organic growth remained a key strength at Alliance Data, indicated by its continued revenue growth. Strategic acquisitions helped it grow inorganically. Solid receivables growth in Card Services along with strength in LoyaltyOne and Epsilon segments should continue to drive top-line growth. A strong balance sheet position enables the company deploy capital in growth initiatives and shareholder-friendly moves. A lowered corporate tax rate, reducing net deferred tax liabilities and future cash tax will help generate additional $100 million in free cash flow. For 2018, core EPS is expected between $22.50 and $23.00 on $8.35 billion revenues.”
Several other equities analysts have also commented on ADS. Barclays upgraded Alliance Data Systems from an equal weight rating to an overweight rating and upped their target price for the company from $265.00 to $310.00 in a research note on Wednesday, January 3rd. Stephens set a $304.00 target price on Alliance Data Systems and gave the company a buy rating in a research note on Tuesday, January 2nd. Royal Bank of Canada reiterated a buy rating and issued a $293.00 target price on shares of Alliance Data Systems in a research note on Thursday, January 4th. Robert W. Baird restated a hold rating and set a $270.00 price target on shares of Alliance Data Systems in a research note on Tuesday, January 9th. Finally, Credit Suisse Group restated an underperform rating and set a $218.00 price target (up from $193.00) on shares of Alliance Data Systems in a research note on Wednesday, January 17th. Four equities research analysts have rated the stock with a sell rating, nine have assigned a hold rating and twelve have assigned a buy rating to the company’s stock. The stock presently has a consensus rating of Hold and an average target price of $273.20.
Alliance Data Systems (NYSE:ADS) last released its earnings results on Thursday, January 25th. The business services provider reported $6.10 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $4.72 by $1.38. The firm had revenue of $2.11 billion during the quarter, compared to analyst estimates of $2.15 billion. Alliance Data Systems had a return on equity of 66.17% and a net margin of 10.22%. The business’s quarterly revenue was up 15.2% compared to the same quarter last year. During the same period in the prior year, the firm posted $4.67 earnings per share. research analysts predict that Alliance Data Systems will post 21.46 EPS for the current year.
The business also recently announced a quarterly dividend, which was paid on Tuesday, March 20th. Stockholders of record on Wednesday, February 14th were given a $0.57 dividend. This is an increase from Alliance Data Systems’s previous quarterly dividend of $0.52. The ex-dividend date of this dividend was Tuesday, February 13th. This represents a $2.28 annualized dividend and a dividend yield of 1.07%. Alliance Data Systems’s dividend payout ratio is presently 12.47%.
In other news, EVP Melisa A. Miller sold 12,246 shares of the company’s stock in a transaction dated Monday, February 26th. The stock was sold at an average price of $245.09, for a total value of $3,001,372.14. Following the completion of the sale, the executive vice president now owns 42,654 shares of the company’s stock, valued at $10,454,068.86. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Edward J. Heffernan sold 21,000 shares of the company’s stock in a transaction dated Friday, February 16th. The stock was sold at an average price of $244.83, for a total value of $5,141,430.00. Following the completion of the sale, the insider now directly owns 264,668 shares of the company’s stock, valued at approximately $64,798,666.44. The disclosure for this sale can be found here. 2.60% of the stock is owned by corporate insiders.
Hedge funds and other institutional investors have recently modified their holdings of the company. Northwestern Mutual Wealth Management Co. boosted its position in shares of Alliance Data Systems by 516.3% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 493 shares of the business services provider’s stock worth $125,000 after buying an additional 413 shares during the period. Tower Research Capital LLC TRC purchased a new stake in shares of Alliance Data Systems in the fourth quarter worth about $152,000. FNY Managed Accounts LLC purchased a new stake in shares of Alliance Data Systems in the fourth quarter worth about $190,000. Cubic Asset Management LLC purchased a new stake in shares of Alliance Data Systems in the fourth quarter worth about $208,000. Finally, Groesbeck Investment Management Corp NJ purchased a new stake in shares of Alliance Data Systems in the fourth quarter worth about $208,000. 94.61% of the stock is 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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