Barclays Raises Estimates & PT on Alliance Data Systems (ADS); Strong Business Indicators and Valuation Upside

Barclays reiterates an 'Overweight' on Alliance Data Systems (NYSE: ADS) price target raised from $109 to $117.

Barclays analyst says, "Key incremental data points from ADS have reinforced our confidence in business drivers, including solid trends in delinquency flows, bankruptcy filings, and recovery rates to-date continuing to point to credit quality improvements ahead; recent acceleration in both Private Label credit sales and portfolio growth; a notable turnaround in Epsilon's Abacus business in 4Q; Loyalty air miles issued growth tracking in the high single-digits, above expectations; and the Brazil Loyalty expansion continuing to perform above plan...Even in an uncertain macro environment, we believe ADS is set up for a solid year ahead, and importantly, we are increasingly confident that secular drivers in higher-multiple businesses where ADS has a distinct competitive advantage (i.e., Epsilon) should support a higher valuation for shares."

Barclays raises FY11 EPS estimate from $7.40 to $7.45 and FY12 from $8.35 to $8.45.

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 $103.70 yesterday.

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