JP Morgan Positive on Alliance Data's Stock Repurchase Plan

JP Morgan has published a research report on Alliance Data ADS after the company announced its new stock repurchase program this morning. In the report, JP Morgan writes, "This morning ADS announced a new stock repurchase program to acquire up to $400mm in common stock during 2012. The new program increases the company's combined repurchase authorizations (since 1Q08) to approximately $2.4bn, of which approximately $1.9bn has been used to purchase approximately 35mm shares (or ~45% of the company's diluted outstanding share base when the program began in 2008). Importantly, the company expects to finance repurchases through free cash flow (and not incremental debt), which gives management the flexibility to pursue additional tuck-in acquisitions and/or portfolio purchases. At current prices, we estimate ADS could redeem ~4.8mm shares (or ~8% of diluted outstanding share base) with the amount remaining on its repurchase authorizations." JP Morgan maintains its Neutral rating on Alliance Data, which is currently trading up $0.54 from Friday's $103 closing price.