Morgan Stanley Turns Bullish On American Express: 'One Of The Fastest EPS Growth Stories In Our Coverage Universe'

Morgan Stanley cited strong revenue and earnings growth and strong consumer card use in a Thursday upgrade of American Express Company AXP. 

The Analyst

Betsy Graseck upgraded AmEx from Equal Weight to Overweight and raised the target price from $123 to $140.

The Thesis

The bottom line is that customers are spending and using credit.

“AXP is driving robust top-line growth from a combination of strong loan and transactional growth,” Graseck said in the Thursday upgrade note. (See the analyst's track record here.) 

Despite a slight first-quarter revenue miss April 18, Graseck said revenue is still growing robustly — and views that growth as sustainable.

Earnings per share look even better, and the analyst said AmEx now has “one of the fastest EPS growth stories in our coverage universe.”

AmEx reported first-quarter EPS of $2.01, beating Street expectations by a few pennies. Its revenue of $10.346 billion just missed analysts’ $10.46-billion estimate. The company guided to fiscal 2019 EPS of $7.85 to $8.35 and revenue growth of 8-10 percent.

Price Action

AmEx shares were trading up 1.47 percent to $115.73 at the time of publication Thursday. 

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