Zacks Investment Research Upgrades American Express (AXP) to Buy

American Express (NYSE:AXP) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research note issued to investors on Tuesday. The brokerage currently has a $120.00 price objective on the payment services company’s stock. Zacks Investment Research‘s target price points to a potential upside of 12.16% from the company’s current price.

According to Zacks, “American Express’ shares have outperformed its industry in a year's time. A solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments are growth drivers. It continues to witness strong loan growth and credit metrics. A number of growth initiatives such as new products, enhancements of features on existing ones, changes to pricing, seem to be bearing fruit now. Its international business seems attractive. However, it is faced with an increase in reward expense led by enhancements to its U.S. platinum products. Cost of card member services has been increasing over the past three years and continues to do so this year, reflecting higher engagement levels across its premium travel services. It is also witnessing an increase in provision of loan losses for the past two and half years.”

Other analysts have also recently issued reports about the stock. DZ Bank raised shares of American Express from a “hold” rating to a “buy” rating in a report on Friday, July 20th. UBS Group raised shares of American Express from a “hold” rating to a “buy” rating in a report on Friday, July 20th. Royal Bank of Canada reissued a “sell” rating and set a $87.00 target price on shares of American Express in a report on Thursday, July 19th. BMO Capital Markets increased their target price on shares of American Express from $103.00 to $106.00 and gave the stock a “market perform” rating in a report on Thursday, July 19th. Finally, Stephens set a $97.00 target price on shares of American Express and gave the stock a “hold” rating in a report on Friday, June 29th. One research analyst has rated the stock with a sell rating, eleven have issued a hold rating and sixteen have given a buy rating to the company. American Express has an average rating of “Buy” and a consensus price target of $109.98.

NYSE AXP opened at $106.99 on Tuesday. American Express has a 12 month low of $87.54 and a 12 month high of $111.77. The company has a debt-to-equity ratio of 2.67, a quick ratio of 1.92 and a current ratio of 1.92. The firm has a market cap of $91.69 billion, a price-to-earnings ratio of 18.23, a P/E/G ratio of 1.47 and a beta of 1.16.

American Express (NYSE:AXP) last posted its quarterly earnings data on Wednesday, July 18th. The payment services company reported $1.84 EPS for the quarter, beating the Zacks’ consensus estimate of $1.83 by $0.01. American Express had a net margin of 9.23% and a return on equity of 30.08%. The firm had revenue of $10 billion for the quarter, compared to the consensus estimate of $10.05 billion. During the same period in the prior year, the firm posted $1.47 EPS. The firm’s revenue was up 9.0% compared to the same quarter last year. On average, research analysts expect that American Express will post 7.24 EPS for the current fiscal year.

American Express announced that its board has authorized a share buyback program on Thursday, June 28th that permits the company to repurchase $3.40 billion in outstanding shares. This repurchase authorization permits the payment services company to buy up to 4.1% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company’s leadership believes its shares are undervalued.

In other news, CFO Scott Murcray acquired 350,000 shares of the company’s stock in a transaction that occurred on Monday, September 3rd. The shares were acquired at an average price of $0.28 per share, with a total value of $98,000.00. The acquisition was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, major shareholder Ventures Fund Vii L.P. Vivo acquired 20,142,123 shares of the company’s stock in a transaction that occurred on Thursday, August 30th. The stock was purchased at an average cost of $0.17 per share, for a total transaction of $3,424,160.91. The disclosure for this purchase can be found here. In the last ninety days, insiders sold 47,448 shares of company stock worth $4,942,168. Corporate insiders own 0.20% of the company’s stock.

Hedge funds have recently added to or reduced their stakes in the stock. GSA Capital Partners LLP acquired a new position in American Express during the 1st quarter valued at about $371,000. Westwood Holdings Group Inc. acquired a new position in American Express during the 1st quarter valued at about $1,203,000. CAMG Solamere Management LLC increased its stake in American Express by 2,569.1% during the 1st quarter. CAMG Solamere Management LLC now owns 133,857 shares of the payment services company’s stock valued at $306,000 after buying an additional 128,842 shares during the period. Ostrum Asset Management acquired a new position in American Express during the 1st quarter valued at about $1,374,000. Finally, United Capital Financial Advisers LLC increased its stake in American Express by 1.4% during the 1st quarter. United Capital Financial Advisers LLC now owns 217,995 shares of the payment services company’s stock valued at $20,335,000 after buying an additional 2,998 shares during the period. 82.85% of the stock is currently owned by institutional investors and hedge funds.

About American Express

American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. It operates through four segments: U.S. Consumer Services, International Consumer and Network Services, Global Commercial Services, and Global Merchant Services.

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