April Credit Improves for Alliance Data Systems In April (ADS)

In a recent report from Goldman Sachs, the credit of Alliance Data Systems

has improved for April as delinquencies are expect to start showing a seasonal improvement. Although the credit has improved, the lack of portfolio growth still causes an issue for the company moving forward due to a lack of loan growth and the underperformance v. bank peers. Goldman Sachs maintains a $77 price target on ADS and a Sell rating. In the report, Goldman Sachs said, "relevant). For reference, our six-bank comps group saw an average 142 bp 30+ day delinquency decrease from June 2010 to April 2011, while ADS managed and Master Trust delinquencies are down 91bp and 84 bp, respectively. We continue to attribute the weakness to recent vintage underperformance, receivables growth, and a struggling retail partner mix." Alliance Data Systems closed yesterday at $91.64.