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.
Related Links
American Express Analyst Finds Positives, Negatives In Q1 Print
Analysts React After American Express Rings Up Q4 EPS, Sales Miss
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