UPDATE: Nomura Raises PT on Alliance Data Systems on Valuation

In a report published Wednesday, Nomura analyst Bill Carcache reiterated a Neutral rating on Alliance Data Systems (NYSE: ADS), and raised the price target from $182.00 to $185.00.

In the report, Nomura noted, “ADS's story is little changed: private label continues to power growth for the overall company and Epsilon is carrying its weight. We're encouraged by management's commentary around the scale of new business wins in PL (it indicated the current vintage can grow to represent $2bn over 3 years, or ~28% of current period-end receivables). We expect the 2013 vintage to be a key driver of loan and earnings growth over the next 2-3 years. We believe that ~50% tender share standard leaves a lot of room for growth and sets a high bar for the company to strive towards with the remainder of its client base. We're nudging our estimates higher to reflect this quarter's results and upbeat commentary on the impact of new business wins. We're leaving our Neutral rating unchanged based on our view that shares are fairly valued (trading at 16.1x / 16.0x 2014 cons. / our EPS ests).”

Alliance Data Systems closed on Tuesday at $193.58.