Fly Watch: American Express Analyst Day Seen As Possible Catalyst
NEW YORK (TheStreet) -- American Express' (AXP) - Get Report investor day, slated to be held this Wednesday, March 25, could provide a positive catalyst for the stock, Deutsche Bank wrote in a note to investors.
ANALYST PREVIEW: The credit card network's investor day could be a positive catalyst for the stock if the company provides more information about its profit outlook by updating the forecasts for its growth, expenses and capital, Deutsche Bank analyst David Ho wrote in a note to investors on March 17. American Express is likely to highlight increased opportunities in the middle market and growth in acceptance of the company's cards in the U.S. and abroad, according to Ho. In the near-term, however, loan growth is probably the easiest way for the company to boost its profits, the analyst believes. Additionally, American Express is likely to provide more details on the impact of the loss of its its co-branding program with Costco (COST) - Get Report, the analyst stated. American Express knows that it needs to demonstrate why consumers will continue to use American Express outside of Costco, the analyst stated. On a negative note, Ho believes that American Express' first quarter guidance "may be cautious," but he added that the company would probably reiterate its targets of 12%-15% EPS growth, 8% revenue growth, and 25% return on equity. Ho kept a $90 price target and Buy rating on the shares.
PRICE ACTION: Since February 12, which is the day that AmEx announced that its U.S. co-brand and merchant acceptance agreements with Costco are set to end in March of next year and won't be renewed, shares of the credit card issuer and financial service provider are down about 3.5%. In midday trading Monday, American Express rose fractionally to trade near $83 per share.
Reporting by Larry Ramer.
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