ADS - Alliance Data Systems cut to Neutral at BofA due to few near-term catalysts

BofA Securities analyst Mihir Bhatia downgrades Alliance Data Systems (ADS) to Neutral on the absence of few near-term catalysts and the expectation of continuing pressure on loan growth and flattish full-year revenue.The downgrade follows a 66% runup in ADS shares YTD, and has "fully recovered from COVID-related concerns about its longer-term viability," Bhatia writes in a note to clients. See how ADS shares' total return compares with other pure-play credit card companies in chart below.Still, ADS management has been performing solidly on multiple fronts, including its new Buy Now, Pay Later offering, announcing the spinoff of its LoyaltyOne business, enhancing its leadership, and setting long-term targets, he said.Maintains $130 price target.ADS stock slips 0.6% in premarket trading.Bhatia's rating aligns with the Neutral Quant rating and breaks from the average Wall Street rating of Bullish (7 Very Bullish, 4 Bullish, 7 Neutral, 1 Bearish).

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Alliance Data Systems cut to Neutral at BofA due to few near-term catalysts