Nomura Securities Raises Numbers on Alliance Data Systems (ADS); However, Shares Look Fully Valued

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ADS Hot Sheet

Rating Summary:
3 Buy, 5 Hold, 1 Sell

Rating Trend:

Up

Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38

Nomura Securities maintains a 'Neutral' on Alliance Data Systems (NYSE: ADS) price target raised $103 to $115.

Analyst, Bill Carcache, said, "ADS reported 4Q11 core EPS of $1.70, compared to our estimate of $1.48, consensus of $1.49, and the company’s guidance of $1.46. The beat relative to our estimate was primarily driven by higher-than-expected revenues from the Private Label and Epsilon businesses and lower-than-expected funding costs. We believe credit leverage will dissipate in 2012 and 2013, and expect earnings growth in the Private Label segment to be driven by core sales growth and new portfolio additions. We are raising our estimates based on our review of the quarter. Our 2012 / 2013 core EPS estimates go to $8.55 /$9.40 (from $8.33 / $9.36), respectively. We’re raising our 2012 PT to $115, which implies ~12.2 times 2013 core EPS (and ~16.1 times 2013 GAAP EPS). While we maintain a positive bias on ADS shares, we remain Neutral based on our view that shares are fully valued."

For an analyst ratings summary and ratings history on Alliance Data Systems click here. For more ratings news on Alliance Data Systems click here.

Shares of Alliance Data Systems closed at $112.35 yesterday, with a 52 week range of $74.25-$114.06.

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