Will American Express (AXP) Stock Be Affected Today by This Analyst Initiation?

NEW YORK (TheStreet) -- Deutsche Bank initiated coverage of American Express Co. (AXP) with a "hold" rating earlier on Thursday.

The firm set the opening price target to $99 for the global payments and travel company.

Deutsche Bank also set annual EPS estimates to $5.56 for fiscal 2014, and to $6.20 for fiscal 2015.

"AXP stock could outperform if we get an acceleration of U.S. real GDP growth or.... credit concerns, but in the meantime, valuation, concerns over competition, and interchange litigation may be a drag," said Deutsche Bank analyst David Ho.

Shares of American Express are down 0.05% to $91.50 in late morning trading on Thursday.

Separately, TheStreet Ratings team rates AMERICAN EXPRESS CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERICAN EXPRESS CO (AXP) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AMERICAN EXPRESS CO has improved earnings per share by 12.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERICAN EXPRESS CO increased its bottom line by earning $4.88 versus $3.87 in the prior year. This year, the market expects an improvement in earnings ($5.54 versus $4.88).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Consumer Finance industry average. The net income increased by 8.1% when compared to the same quarter one year prior, going from $1,366.00 million to $1,477.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Consumer Finance industry and the overall market, AMERICAN EXPRESS CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has significantly increased by 282.67% to $3,701.00 million when compared to the same quarter last year. In addition, AMERICAN EXPRESS CO has also vastly surpassed the industry average cash flow growth rate of 95.56%.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: AXP Ratings Report

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