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American Express Impresses Analysts With International, Digital Strategies

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American Express Impresses Analysts With International, Digital Strategies

American Express Company (NYSE: AXP) is up 17 percent year to date, and its optimism for a strong 2019 certainly made an impression at this week’s Investor Day.

The Ratings

Guggenheim analyst Jeff Cantwell maintained a Neutral rating on the stock, while Wells Fargo analyst Donald Fandetti maintained an Outperform rating with a $125 price target.

The Theses

Both analysts consider American Express well positioned for consistent, double-digit bottom-line growth. For one, it boasts strong international momentum and posted 17-percent growth in its consumer billed business and 23 percent growth among small- and medium-sized international enterprises last year.

“AXP is the top small business issuer in the US, and they are seeing strong international growth in that segment,” Fandetti wrote in a note.

Management continues to target overseas growth by investing in commercial distribution, digital services, consumer products and integrated network expansion.

Additionally, the firm is poised to profit from its recent emphasis on digital services as it shifts focus from “cards” to “membership.” The priority bears sales and growth opportunities only strengthened by marketing gains.

“Given this dynamic and AXP's strong brand, we see the company having plenty of ability to sustain high rates of revenue growth,” Cantwell wrote. “We expect this will be underpinned by AXP's quality partnerships, good investments, and an increasing level of engagement from customers.”

Guggenheim sees promise in American Express’s partnerships with Apple Inc. (NASDAQ: AAPL), Square Inc (NYSE: SQ), Stripe, PayPal Holdings Inc (NASDAQ: PYPL), GreenSky Inc (NASDAQ: GSKY) and, most significantly, Amazon.com, Inc. (NASDAQ: AMZN).

“Given that Amazon operates in 13 countries, we think it's possible that AXP and Amazon eventually expand their partnership into new markets in the future,” Cantwell wrote.

Anticipated integration with PayPal and Venmo could give card members first industry access to person-to-person payments.

Price Action

At time of publication, shares traded flat at $112.30.

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Latest Ratings for AXP

DateFirmActionFromTo
Jan 2019Atlantic EquitiesUpgradesNeutralOverweight
Jan 2019Morgan StanleyMaintainsEqual-WeightEqual-Weight
Jan 2019Wells FargoMaintainsOutperformOutperform

View More Analyst Ratings for AXP
View the Latest Analyst Ratings

Posted-In: Donald Fandetti Guggenheim Jeff CantwellAnalyst Color Price Target Reiteration Analyst Ratings Tech Best of Benzinga

 

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