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Investing.com - BofA Securities has reiterated its Buy rating on American Express (NYSE:AXP) with a price target of $353.00, according to a recent analyst note. The stock, currently trading at $314.06, appears fairly valued according to InvestingPro analysis, with a market capitalization of $219.69 billion.
The financial services firm slightly adjusted its second-quarter earnings per share estimate for American Express to $3.91, up from its previous estimate of $3.88, after accounting for June results and commentary from large banks. This aligns with broader analyst sentiment, as InvestingPro data shows six analysts have recently revised their earnings estimates upward for the upcoming period, with results expected on July 18.
BofA Securities analyst Mihir Bhatia noted that while the firm lowered its loan growth estimates for American Express, it also reduced provision expenses in its forecast.
The analyst identified JPMorgan Chase (NYSE:JPM) as American Express’s closest peer in terms of credit quality, pointing out that JPMorgan lowered its credit card reserve ratio by 30 basis points quarter-over-quarter while seeing loss rates improve in the same period.
BofA Securities is forecasting American Express card loss rates to decrease by approximately 20 basis points quarter-over-quarter, while the reserve ratio is expected to increase by 12 basis points quarter-over-quarter.
In other recent news, American Express reported its June card loan delinquency and write-off rates. The total U.S. Consumer Card Member loans held for investment were $92.6 billion, with a 30-day past due rate of 1.3% and a net write-off rate of 2.1%. For U.S. Small Business Card Member loans, the total was $30.1 billion, with a 30-day past due rate of 1.6% and a net write-off rate of 2.6%. Additionally, William Blair reiterated an Outperform rating on American Express, citing strong engagement from younger consumers as a key growth driver. The Federal Reserve has set American Express’s Stress Capital Buffer requirement at 2.5%, effective from October 2025, reaffirming the company’s strong capital position. American Express plans to refresh its Platinum Cards, with Keefe, Bruyette & Woods maintaining an Outperform rating on the stock. The refresh is seen as a potentially positive move that could drive card fee income growth and higher engagement. Lastly, American Express reclassified $1.6 billion of Card Member loans related to its Amazon (NASDAQ:AMZN) small business cobrand portfolio to loans held for sale, impacting future investment loan reports.
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