Nomura Advises Selling American Express

Nomura’s Bill Carcache recommends current shareholders of American Express Company AXP take advantage of the recent Trump rally.

Carcache maintains a Reduce rating on the company, with a price target of $63.

Time To Reduce Position

The analyst believes that American Express shareholders should “opportunistically rotate out” into Discover Financial Services DFS and Synchrony Financial SYF, given that both stocks are expected to outperform American Express over the next two years.

Carcache believes “AXP's expense levers give it a finite amount of time, but we expect the degradation in the efficacy of its investment spending to persist and don't expect the market to wait until AXP's expense leverage is gone to de-rate shares.”

The analyst continued his cautious stance on the company despite the estimates being in line with the consensus expectations.

At Last Check

• American Express was down 0.6 percent at $74.46.
• Discover Financial shares were down 0.32 percent at $71.82.
• Synchrony was down 0.52 percent at $36.46.