An Important Date Is Coming For American Express

In a report published Wednesday, Deutsche Bank analyst David Ho maintained a Buy rating on American Express Company (NYSE: AXP), with a price target of $90.The company is scheduled to host its Investor Day on March 25, 2015. Ho believes that this could be "a positive catalyst," provided there is increased visibility on growth, expenses and capital. In the report Deutsche Bank noted, "We expect more transparency on mgmt's Costco (NASDAQ: COST) assumptions, including: loan profitability (spread vs. credit costs), fee margins, balances (in-store vs. out of store), and/or drag from Costco incentives."Although it may be too early to "publicly discuss mitigation plans in detail," the company needs to "better demonstrate why spending outside of Costco would be loyal to AMEX," the analyst wrote. "Mgmt will highlight opportunities in middle market, US acceptance (via OptBlue), and international (via GNS). Near-term, growing card balances is likely the easiest path to boost EPS: an $80 increase in avg. card balances among the ~40% of US cards that can borrow has roughly the same EPS impact from a $275 increase in spending for across all US cards (from fees)," the report mentioned.The company is expected to identify where it intends to invest this year. "We assume double the growth in US rewards/marketing costs (+13-15%), partially offset by efficiency gains in 2H15 (from 2014 restructuring) and in 2016 (from more restructuring this year)."American Express may indicate more aggressive capital deployment next year, "after breaking the 100% payout barrier this year," Ho added.