JPMorgan’s Richard Shane and team explain why they upgraded American Express (AXP) but cut their price target following the company’s better-than-forecast earnings:
Associated Press We believe that the recent selloff in American Express shares has substantially reduced downside risk. As a result, we are moving to a Neutral recommendation on the stock. While we expect volatility to remain heightened in the near term, we believe upside/downside is now more balanced. Based on our estimates, we believe that the American Express multiple now reflects a 5% discount to its historical relative multiple (versus the S&P 500). Our reduced price target ($90 from $95) reflects the broader re-pricing of equities given increased risk to global growth. Our revised price target of $90 implies an annualized total return of 10.4%.
Shares of American Express have dropped 1.1% to $80.01 at 10:39 a.m. today, and are down 12% so far this year.
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