UPDATE: Wolfe Research Downgrades Alliance Data Systems (ADS) to Peerperform

(Updated - March 17, 2022 7:23 AM EDT)

Wolfe Research analyst Darrin Peller downgraded Alliance Data Systems (NYSE: ADS) from Outperform to Peerperform.

The analyst comments "We entered 2022 bullish on the Credit Card Issuers based on our view that payment rate normalization tailwinds and elevated reserve rates well above Day 1 levels would more than offset headwinds from credit normalization and growth math, but we have grown incrementally more cautious on the group in the aftermath of Russia’s February 24th invasion of Ukraine. Although we are hopeful that a peaceful settlement will be reached in relatively short order, the risk of elevated inflation (particularly if Russia remains isolated) leads us to believe a less bullish stance on the group is appropriate. We are particularly concerned about the health of the low-end consumer amid growing inflationary pressures (including rising gasoline prices) and downgrade the Credit Card Issuers space to Market Weight (from Overweight). At the stock level, we downgrade Capital One Financial (COF), Synchrony Financial (SYF), and Alliance Data Systems (ADS) to Peer Perform (from Outperform). We expect relative outperformance from American Express (AXP) and Discover Financial (DFS), which remain Outperform rated."

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 $62.24 yesterday.

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