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On Monday, BTIG analyst Vincent Caintic updated the firm's stance on American Express (NYSE:AXP) shares, raising the price target to $272 from $270 while reiterating a Sell rating on the stock. This comes as AXP trades near its 52-week high of $326.27, having delivered an impressive 61.3% return over the past year. Caintic explained the rationale behind the persistent Sell rating, despite a more optimistic outlook for consumers in 2025. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, despite maintaining a "GREAT" overall financial health score. The analyst's conservative view on the broader consumer market, particularly the impact on sub-prime and moving up through near-prime and prime consumers, underpins the rating.
American Express has managed to keep net write-off rates lower than the levels seen in 2019, which Caintic attributes to tighter underwriting standards. The analyst stated that a potential shift to a more positive stance on AXP shares would require write-off rates to remain low while billed business returns to historical levels. Although 4Q24 showed robust billed business, Caintic was not convinced by the revenue growth guidance for 2025, which does not seem to match the strength observed in the fourth quarter of 2024.
Caintic expressed surprise that the company's expenses are not decelerating more significantly. This concern is compounded by the belief that higher expenses may be necessary to sustain the projected revenue growth in 2025. The analyst's comments suggest that despite the recent strong performance in billed business, the challenges of maintaining growth and managing expenses could hinder American Express's financial outlook for the upcoming year. The stock currently trades at a P/E ratio of 23.26, reflecting market expectations for continued growth despite these challenges.
In other recent news, American Express has been the focus of several analysts' reports. Evercore ISI raised the company's stock target to $344, pointing to higher sector multiples and positive revisions to earnings per share (EPS) for 2025 and 2026. The firm also noted a modest increase in non-interest income due to anticipated higher discount revenue.
Bank of America Securities lifted its price target for American Express to $326, maintaining a neutral stance. The bank highlighted that the company's fourth-quarter earnings met expectations, with EPS slightly missing due to higher operating expenses.
Wolfe Research maintained a Peerperform rating on American Express, noting that the company's fourth-quarter EPS matched estimates and exceeded their expectations. The firm acknowledged the balance between strengths and challenges in the company's results.
Goldman Sachs reaffirmed a Buy rating on American Express shares with a steady price target of $350, despite pre-tax pre-provision net revenue falling short of expectations due to higher expenses. The company's total billed business grew by 6.8% year-over-year, outpacing consensus estimates.
Lastly, Truist Securities reaffirmed its Buy rating on American Express, maintaining a $350 price target. The firm noted the company's potential to achieve the higher end of their revenue forecast due to stronger-than-anticipated spending in the fourth quarter. These are recent developments in the financial analysis of American Express.
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