American Express: Strong Financial Performance and Credit Quality Justify Buy Rating

Analyst Mihir Bhatia of Bank of America Securities maintained a Buy rating on American Express (AXP – Research Report), boosting the price target to $318.00.

Mihir Bhatia has given his Buy rating due to a combination of factors that highlight American Express’s strong financial performance and credit quality. The company has demonstrated robust loan growth, with April ending loan balances showing a significant year-over-year increase, outperforming historical seasonal trends. This growth is particularly evident in both the Consumer and Small Business segments, indicating a resilient higher-income cardmember base.
Bhatia also notes the improvement in net write-off rates, which have decreased more than expected, reflecting best-in-class credit quality. The loss rates for both US Consumer and Small Business segments have shown a favorable trend, surpassing the typical seasonal improvements. These positive financial metrics, along with stable delinquency rates, support the decision to maintain a Buy rating, with a price objective of $318.00 USD.

In another report released today, KBW also maintained a Buy rating on the stock with a $360.00 price target.

Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AXP in relation to earlier this year.