Zacks Investment Research lowered shares of Alliance Data Systems (NYSE:ADS) from a buy rating to a hold rating in a research report released on Tuesday, March 6th.
According to Zacks, “Organic growth remained a key strength at Alliance Data, indicated by its continued revenue growth. 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. A strong balance sheet position enables the company deploy capital in growth initiatives as well as 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. However, increasing operating expenses, increasing debt level and dependence on limited clients for revenues concern. Shares of Alliance Data have underperformed the industry in a year's time. Nonetheless, the company witnessed its 2018 estimates move north in the last 30 days.”
ADS has been the subject of several other research reports. Barclays restated an equal weight rating and issued a $298.00 target price (up previously from $278.00) on shares of Alliance Data Systems in a research note on Monday, January 8th. Royal Bank of Canada restated 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 issued a $270.00 target price on shares of Alliance Data Systems in a research note on Tuesday, January 9th. JMP Securities raised their target price on Alliance Data Systems from $285.00 to $310.00 and gave the stock a market outperform rating in a research note on Friday, January 26th. Finally, Cowen downgraded Alliance Data Systems from an outperform rating to a market perform rating in a research note on Monday, January 29th. Three analysts have rated the stock with a sell rating, nine have given a hold rating and twelve have assigned a buy rating to the company. The stock presently has a consensus rating of Hold and an average price target of $275.05.
Alliance Data Systems (NYSE:ADS) last announced its quarterly earnings data on Thursday, January 25th. The business services provider reported $6.10 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.72 by $1.38. The firm had revenue of $2.11 billion during the quarter, compared to the consensus estimate 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 revenue for the quarter was up 15.2% on a year-over-year basis. During the same quarter in the prior year, the company earned $4.67 EPS. equities research analysts expect that Alliance Data Systems will post 21.49 earnings per share for the current fiscal year.
The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 20th. Investors of record on Wednesday, February 14th will be issued a dividend of $0.57 per share. This represents a $2.28 dividend on an annualized basis and a dividend yield of 1.00%. This is a boost from Alliance Data Systems’s previous quarterly dividend of $0.52. The ex-dividend date is Tuesday, February 13th. Alliance Data Systems’s dividend payout ratio (DPR) is currently 16.14%.
In related news, EVP Melisa A. Miller sold 12,246 shares of the firm’s stock in a transaction dated Monday, February 26th. The stock was sold at an average price of $245.09, for a total transaction of $3,001,372.14. Following the transaction, the executive vice president now directly owns 42,654 shares of the company’s stock, valued at approximately $10,454,068.86. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider Edward J. Heffernan sold 21,000 shares of the firm’s stock in a transaction that occurred on 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 transaction, the insider now owns 264,668 shares in the company, valued at $64,798,666.44. The disclosure for this sale can be found here. Company insiders own 2.60% of the company’s stock.
Institutional investors and hedge funds have recently bought and sold shares of the stock. Elkfork Partners LLC bought a new stake in shares of Alliance Data Systems in the 4th quarter worth approximately $541,000. Xact Kapitalforvaltning AB grew its position in shares of Alliance Data Systems by 4.0% in the 4th quarter. Xact Kapitalforvaltning AB now owns 11,317 shares of the business services provider’s stock worth $2,869,000 after buying an additional 434 shares during the last quarter. CNB Bank bought a new stake in shares of Alliance Data Systems in the 4th quarter worth approximately $506,000. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp grew its position in shares of Alliance Data Systems by 12.9% in the 4th quarter. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp now owns 22,857 shares of the business services provider’s stock worth $5,794,000 after buying an additional 2,603 shares during the last quarter. Finally, Her Majesty the Queen in Right of the Province of Alberta as represented by Alberta Investment Management Corp grew its position in shares of Alliance Data Systems by 21.7% in the 4th quarter. Her Majesty the Queen in Right of the Province of Alberta as represented by Alberta Investment Management Corp now owns 26,400 shares of the business services provider’s stock worth $6,692,000 after buying an additional 4,700 shares during the last quarter. Institutional investors and hedge funds own 94.61% of the company’s stock.
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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