Alliance Data Systems Corporation
) to beat expectations when it reports fourth quarter and full
year 2012 results on Jan 31.
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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
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
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
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
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
Global Payments Inc.
), Earnings ESP of +1.14% and Zacks Rank #2 (Buy).
), Earnings ESP of +0.84% and Zacks Rank #2 (Buy).
), Earnings ESP of +1.12% and Zacks Rank # 3 (Hold).