Stephens analyst Vincent Caintic upgraded Alliance Data (ADS) to Equal Weight with a price target of $160 citing valuation following the 13% decline in the stock price after the sale of Epsilon. The analyst sees the current forward earnings multiple on the stock at 7.4-times as "reasonable" and comparable to that of its peer Synchony (SYF). Caintic also contends that the market anticipates a decline in the company's Card Services and LoyaltyOne business. Longer term, the analyst remains "fundamentally concerned" about Alliance Data with no expected positive catalysts this year.

Says receivables growth consistent with expectations, payment rate slightly lower than expectations and purchase volume below expectations. Says net interest income growth higher than expectations due to lower than expected payment rate and lower than expected deposit betas. Says credit, RSA and other expense largely in-line with expectations. Says expects typical seasonality in purchase volume, loan receivables, net interest income and in credit performance. Says expects net charge-offs to peak mid-year. Says expects reserve coverage at year-end to be lower than '23 year-end rate. Says expects RSA to align to program performance and function as designed. Comments taken from Q1 earnings conference call.

Reports Q1 revenue $4.8B, consensus $4.45B. Reports Q1 CET1 capital ratio 12.6%. Reports Q1 net charge-offs 6.31%. "Synchrony's first quarter performance highlights the resiliency of our business model and focus on delivering sustainable, strong results for each of our stakeholders," said Brian Doubles, Synchrony's President and Chief Executive Officer.