Wedbush Starts Alliance Data Systems (ADS) at Neutral
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Wedbush initiates coverage on Alliance Data Systems (NYSE: ADS) with a Neutral rating and a price target of $225.00.
Analyst Moshe Katri commented, "We are initiating coverage with a NEUTRAL rating and $225 price target. We attribute the main driver for the street's re-rating during the past 2 years to M&A integration challenges as well as to the market's concerns over the detrimental impact of the credit cycle. Fundamentally, we believe ADS provides a unique value-added proposition to retailers through bundling private label card issuance, processing and loyalty/analytics solutions. We also believe the significant merchant portfolio wins during the past 2-3 years are a function of the increased relevance of ADS' analytics solutions (bundled with other solutions), as mobile commerce/payments gradually become mainstream. We expect ADS to post 7-10% organic top-line growth and 10-12% adj. EPS growth in the next few years. ADS' stock currently trades at 11.3X WS/consensus FY17E adj. EPS."
Shares of Alliance Data Systems closed at $217.26 yesterday.
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