American Express Shares On The Rise Following Strong Q1 Print
According to Arren Cyganovich, American Express' earnings report was "strong" and driven by "surprising" acceleration of adjusted revenue growth which rose by 7 percent year-over-year.
Perhaps more important, American Express proved its business is "more resilient than we gave them credit" as initiatives in customer acquisitions, product enhancements, and business investments are "still bearing fruit."
Positives Are Already Priced Into Shares
However, Cyganovich did cite rising reward costs and card-member services as a headwind moving forward given the highly intense competition for premium customers. Specifically, rewards such as airport lounge access, cobrand air benefits and Uber reimbursements cost the company $1.8 billion during the quarter. In fact, the analyst expects reward costs to grow at a faster pace compared to its billed business.
Overall, the analyst feels "increasingly positive" after American Express' report showed a rebound in the top and bottom lines. This fact, along with other encouraging signs of the business are already priced into the stock at current levels.
Shares remain Neutral rated with a price target boosted from $84 to $85 due to the analyst's 2017 earnings per share revision from $5.62 to $5.70 and 2018's earnings per share revision from $6.23 to $6.30.
At last check, shares were up 3.41 percent at $78.13.
Latest Ratings for AXP
|Mar 2017||Tigress Financial||Initiates Coverage On||Neutral|
|Jan 2017||Keefe Bruyette & Woods||Upgrades||Market Perform||Outperform|
|Jan 2017||JP Morgan||Upgrades||Neutral||Overweight|
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