A Trio Of Financial Upgrades: American Express, JPMorgan And Wells Fargo

Guggenheim issued a trio of upgrades Tuesday, raising ratings for American Express Company AXP and JPMorgan Chase & Co. JPM from Neutral to Buy. The firm also raised its rating for Wells Fargo & Co WFC from Sell to Neutral.

According to analyst Eric Wasserstrom, all three financial sector giants have key similarities.

Bullish Stances

First, each of the stocks has made improvements to its EPS outlook. American Express and JPMorgan now have significant growth potential, and Wells Fargo earnings seemed to have stabilized following the company’s fraudulent accounts scandal.

Second, Guggenheim no longer has a cautious overall view of the banking and specialty finance space following the pullback in the financial sector in recent weeks.

Finally, the three upgraded stocks all have specific potential EPS drivers ahead outside of the general bullish themes impacting the sector as a whole.

Trio Themes

For now, Guggenheim is pursuing two distinct investing themes in the financial sector. The first theme is catalyst-driven value stocks, a group that includes American Express, Ally Financial Inc ALLY, Citigroup Inc C and Morgan Stanley MS.

The other theme is differentiated revenue growth stocks, which includes JPMorgan, Alliance Data Systems Corporation ADS and Synchrony Financial SYF.

Guggenheim now has a $90 price target for American Express and a $96 price target for JPMorgan.

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