American Express: Strong Loan Growth and Stable Credit Performance Support Buy Rating

Analyst Mihir Bhatia from Bank of America Securities reiterated a Buy rating on American Express (AXP – Research Report) and keeping the price target at $318.00.

Mihir Bhatia has given his Buy rating due to a combination of factors including American Express’s strong credit card loan growth and stable credit performance. Despite a slight deceleration in loan growth compared to historical trends, the company still maintains double-digit growth, outperforming its peers and aligning with first-quarter trends. This resilience is further supported by the company’s net charge-offs, which, although slightly increased, remain in line with historical seasonality and are considered best-in-class.
Bhatia also notes that while the loan growth has slowed slightly, the overall performance remains robust with a year-over-year increase in ending loan balances. The loss rates, though slightly up, are consistent with historical patterns and better than expected for the second quarter. Additionally, improvements in delinquency rates and stable-to-better loss rate trends suggest a positive outlook. These factors, combined with an increased billings growth outlook due to resilient consumer spending and favorable foreign exchange conditions, support the maintained price objective and Buy rating.

In another report released on June 11, Wells Fargo also reiterated a Buy rating on the stock with a $350.00 price target.

AXP’s price has also changed slightly for the past six months – from $303.570 to $294.220, which is a -3.08% drop .