American Express, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Mihir Bhatia from Bank of America Securities maintained a Buy rating on the stock and has a $353.00 price target.
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Mihir Bhatia’s rating is based on several strategic insights regarding American Express’s upcoming U.S. Platinum Card refresh. He anticipates a temporary rise in variable consumer engagement costs (VCE) due to enhanced card benefits, which historically have led to improved customer retention rates. This pattern was observed in previous Platinum card refreshes and is expected to repeat, with VCE costs increasing initially but stabilizing over time.
Bhatia also notes that despite concerns about potential attrition due to increased annual fees, historical data suggests these fears are overstated. The attrition rates following past refreshes were relatively low, indicating strong customer loyalty. Furthermore, the card refresh is seen as a growth driver, potentially boosting acquisitions, retention, and spending. While higher VCEs could pressure future estimates, they also indicate a shift towards premium products, which could enhance fee revenue and reduce credit costs.
In another report released on August 7, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $330.00 price target.