Alliance Data Shares Up On Positive Default Trend

DES MOINES, Iowa (AP) — Shares of Alliance Data Systems Corp. rose to a 52-week high on Friday after the company said defaults on its private-label credit cards fell and analysts looked favorably on recent trends.

The Dallas-based company provides private-label credit card services to a number of retailers and wholesalers, including Victoria's Secret, Ann Taylor and Pottery Barn.

It said net chargeoffs, or the amount of loans written off as unpaid, as a percentage of average managed receivables, fell to 9 percent from 9.7 percent in August.

Raymond James and Associates Inc. analyst Wayne Johnson reiterated his "Outperform" rating, saying the stabilization of loss rates and positive financing and acquisition trends should be good for the company this year and in 2010.

Fox-Pitt Kelton analyst Roger Smith increased his 2009 earnings estimate to $5.12 per share closer to the company's guidance of $5.15.

Analysts surveyed by Thomson Reuters expect $5.05 per share.

Smith said the company's performance outpaced most general purpose credit card issuers including American Express, Capital One and Bank of America.

Shares rose $2.40, or 3.7 percent, to $67.30 in afternoon trading. They have traded between $22.76 and $65.95 in the past year.