Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We expect Alliance Data Systems Corporation (ADS - Analyst Report) to beat expectations when it reports fourth quarter and full year 2012 results on Jan 31.

Why a Likely Positive Surprise?

Our proven model shows that Alliance Data is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: .Alliance Data currently has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +2.38%, as the Most Accurate Estimate is at $1.72 and the Zacks Consensus Estimate is at $1.68.

Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.  

The combination of Alliance Data’s Zacks Rank # 3 (Hold) and +2.38% ESP makes us very confident regarding a positive earnings beat on Jan 31.

What is Driving the Better Than Expected Earnings?

Continued focus on strategic acquisitions to grow inorganically, national rollout of its dotz coalition loyalty program in Brazil, consistent share buybacks and inking long-term deals are expected to drive positive earnings surprise in the upcoming quarter.

The recent acquisition of Hyper Marketing will not only procure Epsilon brands including Mars, Unilever, The Home Depot, and Kellogg in its portfolio but also enhance Epsilon’s digital capabilities to further develop primary digital channels. The company also has a new $400 million share buyback program under its authorization.

The positive trend is seen in the trailing four-quarter average surprise of 7.91%, which included a 2.35% positive surprise in the last reported quarter. The better-than-expected results came on the back of strong performances across all segments.

Other Stocks to Consider

Alliance Data is not the only firm looking up this earnings season. We also see likely earnings beats coming from these 3 industry peers:

Global Payments Inc. (GPN - Snapshot Report), Earnings ESP of +1.14% and Zacks Rank #2 (Buy).

Mastercard Incorporated (MA - Analyst Report), Earnings ESP of +0.84% and Zacks Rank #2 (Buy).

Visa Inc. (V - Analyst Report), Earnings ESP of +1.12% and Zacks Rank # 3 (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%