Oppenheimer Maintains a Hold Rating on Alliance Data Systems (ADS)

By Carrie Williams

Oppenheimer analyst Dominick Gabriele maintained a Hold rating on Alliance Data Systems (ADSResearch Report) yesterday. The company’s shares closed on Friday at $174.98.

Gabriele said:

“In our note Deconstructed, dated 1/28/19, we provided investors a template and our base case that we expected Epsilon’s deal value to be ~$5B. This represents a ~10.5x 2018FY Epsilon EBITDA. On Friday, it was announced that there are two bids for Epsilon, one from Publicis and a joint bid from Goldman/Advent with the potential value at ~$5B, right in line with our expectations. No offer has been accepted, and we don’t know how far along in the process ADS is in talks. We do expect ADS to be successful in a sale. Sticking points are not only the dollar amounts offered but the terms of an ongoing contract for ADS to use Epsilon’s Conversant data technology.”

According to TipRanks.com, Gabriele is a 1-star analyst with an average return of -1.6% and a 46.2% success rate. Gabriele covers the Financial sector, focusing on stocks such as Discover Financial Services, Credit Acceptance Corp, and Santander Consumer USA.

Currently, the analyst consensus on Alliance Data Systems is a Moderate Buy with an average price target of $192.29.

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The company has a one-year high of $250.27 and a one-year low of $142.58. Currently, Alliance Data Systems has an average volume of 664.6K.

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Alliance Data Systems Corp. engages in the provision of data-driven and transaction-based marketing and customer loyalty solutions. It operates through the following segments: LoyaltyOne, Epsilon and Card Services. The LoyaltyOne segment provides coalition and short-term loyalty programs. The Epsilon segment offers end-to-end, integrated marketing solutions.