Heard on the Street: American Express has gotten a boost from its push toward the highest tier of spenders, but now it needs to show more progress on cost control
American Express says it has a premium customer. Does that mean it should trade at a premium multiple?that might start to exceed levels seen prior to the pandemic. Not so for American Express.
While on its quarterly earnings call on Friday it said it anticipates write-offs to move higher in 2023 from unusually low levels last year, it is now currently reserving for credit losses representing 2.4% of total loans and card-member receivables. That is below where reserves started at the beginning of 2020, at 2.9%, after new loan-loss accounting rules had kicked in but before the pandemic had.
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