Citigroup analysts upgraded Amex stock to Neutral from Sell while raising their price target to $154 from $143.
The much-talked-about recession has yet to arrive and that’s caused analysts to temper their bearish bets on American Express stock.
Citigroup analysts upgraded Amex stock to Neutral from Sell while raising their price target to $154 from $143. Amex shares recently changed hands at $144. While the upgrade to Neutral isn’t exactly a glowing endorsement of Amex stock, it is a reflection of an economy that has been persistently strong despite a slew of headwinds ranging from higher interest rates, inflation, and geopolitical concerns. Despite all that, households are still spending on travel and entertainment—up 13% year over year at Amex—while also still making their payments on time.
“Credit quality has been much more resilient than we expected,” wrote Citigroup analyst Arren Cyganovich Wednesday, noting that Amex’s net-charge-off rate for the month of September was 1.7%, or 30 basis points below prepandemic levels. Newsletter Sign-up Cyganovich’s prior Sell rating had been predicated on the notion that Amex would see credit deterioration hit prepandemic levels while also experiencing slowing purchase volume and spending growth. But instead, while posting fiscal-fourth-quarter earnings last week, Amex showed only a “modest slowing” in spending growth—down five percentage points from the prior year. While the rate of growth slowed, overall spending levels are “healthy,” Cyganovich wrote.
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