Oppenheimer Initiates a Sell Rating on Alliance Data Systems

By Carrie Williams

Oppenheimer analyst Ben Chittenden initiated coverage with a Sell rating on Alliance Data Systems (NYSE: ADS) yesterday and set a price target of $185. The company’s shares closed yesterday at $245.06.

Chittenden commented:

“When we initiated on ADS with an Underperform (4/10/17 at $251), our main thesis was that the profitability of the business was under pressure and earnings expectations would have to come in over the next 6-12 months. As that happened we expected valuation to contract more towards a credit card multiple and thus saw significant downside to shares.”

According to TipRanks.com, Chittenden is a 1-star analyst with an average return of -0.3% and a 51.1% success rate. Chittenden covers the Financial sector, focusing on stocks such as Sutherland Asset Management Corporation, America First Tax Exempt LP, and Discover Financial Services.

Alliance Data Systems has an analyst consensus of Moderate Buy, with a price target consensus of $257.44.

The company has a one year high of $266.25 and a one year low of $185.02. Currently, Alliance Data Systems has an average volume of 633.7K.

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Alliance Data Systems Corp. engages in the provision of data-driven and transaction-based marketing and customer loyalty solutions. The company operates through the business segments: LoyaltyOne, Epsilon, and Private Label Services and Credit. The LoyaltyOne segment provides marketing services and also designs, builds, and maintains both standalone loyalty programs for individual clients, and coalition loyalty programs, including the AIR MILES Reward Program. The Epsilon segment offers integrated direct marketing solutions that combine database marketing technology and analytics with a broad range of direct marketing services, including email marketing campaigns. The Private Label Services and Credit segment comprises of risk management solutions, account origination, funding, transaction processing, customer care, and collections services for the company’s private label retail credit card programs. Its primary markets include retail, financial services, hospitality, healthcare, consumer packaged goods, grocery, and pharmaceutical. The company was founded in 1996 and is headquartered in Plano, TX.