Nomura Securities Downgrades American Express (AXP) to Reduce on Flaccid Earnings
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Nomura Securities downgraded American Express (NYSE: AXP) from Neutral to Reduce with a price target of $56.00 (from $62.00), saying the companies earnings power is under scrutiny.
Analyst Bill Carcache commented, "We expect the tug of war between bulls and bears to intensify in 3Q16, which marks the first quarter that AXP will report excluding Costco. We believe the combination of softer-than-expected revenues and higher-than-expected expenses will weigh on AXP. Layer in what we expect will be a fourth year of market share losses in U.S. billings and growing concerns about business model risk, and we're left with what we view as a recipe for underperformance. We expect AXP to eventually reduce its long-term financial targets, with its EPS growth range declining to 10-12% from 12-15%. Relative to the returns they generate, we believe AXP is overvalued and DFS is undervalued. FY16E EPS at $5.67; FY17E EPS at $5.60."
Shares of American Express closed at $64.36 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades, Hot Downgrades
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