AmEx: Financial Winners and Losers

(Updated with fresh stock prices, Bove note on Morgan Stanley.)

NEW YORK (TheStreet) -- American Express (AXP Quote) was among the losers of the financial sector Friday even after beating estimates with its third-quarter earnings report.

After Thursday's closing bell, American Express posted a profit of $640 million, or 53 cents a share, down 21% from a year ago. Excluding one-time items, AmEx said it earned 43 cents a share, a nickel better than the Thomson Reuters average estimate.

AmEx said its provision for loan losses for the latest quarter was $1.2 billion, down 13% from the same period a year earlier. Charge-offs related to its cardmember loans improved to 8.9% on a managed basis for the third quarter, down from 10% sequentially. Still, AmEx shares were lately down $2.02, or 5.5%, to $34.42.

Among other credit-card providers, Capital One Financial (COF Quote) jumped by 7% a day after reporting strong third-quarter earnings. Fox-Pitt Kelton analyst Bill Carcache upgraded the stock to outperform, raised his stock price target to $48 from $38 and upped his full-year 2009 and 2010 earnings estimates.

"The biggest factor behind the increase in our revised normalized earnings estimate is higher-than-expected revenue margins," Carcache wrote in a research note. "We also believe Capital One is uniquely positioned to continue to benefit from ongoing fee and finance charge reversals, a strong deposit funding base, and the redeployment of its $38 billion liquidity investment portfolio to higher yielding loans."

Capital One shares were climbing by $2.67 to $41.

CIT Group (CIT Quote) was also among the winners Friday after the Wall Street Journal reported the embattled lender has reached a tentative agreement with Goldman Sachs(GS Quote) to ease the terms of a disputed loan, a development that would smooth the way for CIT to gain new financing from its bondholders.