Goldman Sachs Says American Express Is a 'Sell'

Shares of American Express ( AXP) were down nearly 5% in early trading after a Goldman Sachs analyst downgraded shares of American Express to a sell.

The analyst sees continued earnings headwinds, which may force the company to break-even in 2009.

The company recently reported its fourth-quarter profit fell 76% to $172 million, or 15 cents per share, compared with earnings of $831 million, or 71 cents per share, a year earlier.

We continue to avoid shares of American Express, as we have since our early June coverage began, when the stock was trading at $44.65. The company has a 5.92% dividend yield, based on last night's closing stock price of $12.17.

The stock has technical support in the $6 to $8 price range. If the shares can manage to rebound, we see overhead resistance around the $15 to $17 price levels. We would look elsewhere for better investment opportunities at this time.

American Express is not recommended at this time, holding a Dividend.com Rating of 2.7 out of 5 stars.

Staples Misses Fourth-Quarter EPS Estimates

Shares of Staples ( SPLS) were basically trading flat this morning, after the leading office products retailer announced fourth-quarter profit fell 14% to $286 million, or 40 cents per share, compared to $333.2 million, or 47 cents per share, from the year-ago period.

Revenue gained 16% to $6.17 billion from $5.32 billion, aided by results from its recent acquisition of Corporate Express. Same-store sales did fall a disappointing 13%.

Looking ahead, management would not provide any future guidance, due to further economic uncertainties.

We have avoided shares of Staples since our early June coverage began and the stock was trading at $23.23. The company has a dividend yield of 2.1%, based on last night's closing stock price of $15.74.

The stock has technical support in the $10 to $12 price range. If the stock can manage to gain some traction, we see initial overhead resistance around the $18 to $19.50 price levels. We would remain on the sidelines for now.

Staples is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.

Vail Resorts Shares Up 11% on Second-Quarter Profit Growth

Shares of Vail Resorts ( MTN) were up nearly 11% in early trading, after the company reported second-quarter profit rose 18% to $60.5 million, or $1.65 per share, from $51.3 million, or $1.31 per share, a year ago.

Revenue gained 8% to $388.8 million, from $360 million, as the company saw gains from real estate sales and the full operations of a new resort.

The company saw fewer out-of-state guests visiting the resort, and with that, management sees weaker trends for the rest of fiscal 2009. The company does plan on implementing a wage reduction program to help cut costs and possibly save jobs.

Shares of Vail are way off of all-time highs of $66 hit in October 2007. The stock has technical support in the $11 to $14 price range. If the stock can begin to stabilize, we see initial overhead resistance around the $20 to $23 levels. We do not currently rate this non-dividend paying stock, but do follow the company closely.

Vail Resorts does not currently pay a dividend.

J. Crew Rises on Better-Than-Expected Fourth-Quarter Results

Shares of J. Crew Group ( JCG) are up nearly 8% in early trading, after it reported a smaller-than-expected fourth-quarter loss of $13.5 million, or 22 cents per share, compared with a year-ago profit of $25 million, or 39 cents per share.

The company said revenue dropped 3% to $388 million from $399.9 million last year, as management continued to implement cost controls that included job cuts and wage freezes.

Looking ahead, management sees first-quarter EPS coming in between 7 cents to 12 cents. The consensus estimates are for 10 cents.

Shares of J. Crew are way off of all-time highs of $56 a share, hit in June 2007. The stock is trading near all-time technical lows of $8 to $9 per share. If the stock can continue today's rebound, we see initial overhead resistance in the $14 to $15 price range. We do not currently rate this non-dividend paying stock, but do follow the company closely.

J. Crew Group does not currently pay a dividend.

Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.
At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.

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