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UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on Alliance Data Systems Corporation

Related ADS
Alliance Data Systems Lower After Mixed Q4 Report, Lower Guidance
Earnings Scheduled For January 26, 2017

In a report published Friday, BMO Capital Markets reiterated its Market Perform rating on Alliance Data Systems Corporation (NYSE: ADS), and raised its price target from $140.00 to $155.00.

BMO Capital Markets noted, “We are not surprised to see the market shrug off news of a change in the Air Miles breakage rate; we believe a large part of the strength in ADS stock over the past year has been driven by investors' increased comfort with the flexibility of the program. In this case, higher product gross margins are expected to offset the lower breakage in 2013. Organic revenue growth challenges at Epsilon have also been shrugged off and while the outlook remains a bit cloudy, management continues to take the opportunity to address cost overlaps; in particular, realignment of sales by vertical rather than product reflects a more integrated Epsilon, not a “roll-up.” Additional acquisitions should be expected, though we do not expect them to be of the agency variety like Aspen and Hyper. Instead, we wouldn't be surprised to see Epsilon looking more closely across the ad technology landscape, where VC funding is drying up and some sellers' expectations could begin to ease.”

Alliance Data Systems Corporation closed on Thursday at $157.60.

Latest Ratings for ADS

Dec 2016JP MorganDowngradesOverweightNeutral
Nov 2016GuggenheimInitiates Coverage OnBuy
Oct 2016Atlantic EquitiesInitiates Coverage onOverweight

View More Analyst Ratings for ADS
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Posted-In: BMO Capital MarketsAnalyst Color Price Target Analyst Ratings


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