Nomura Securities Assumes Coverage on American Express (AXP) at Buy; Evolving into a Lower Risk

July 10, 2012 8:16 AM EDT
Get Alerts AXP Hot Sheet
Price: $77.49 --0%

Rating Summary:
    11 Buy, 16 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 31 | New: 34
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Nomura Securities assumes coverage on American Express (NYSE: AXP) with a Buy. PT $69.00.

Analyst, Bill Carcache, said, "Well positioned for growth as the pool of US card industry profits shrinks, AXP is evolving into a lower-risk, higher return business. We are bullish on fee-based initiatives expected to be a meaningful contributor of revenues by 2014. Expense management will likely drive the next wave of earnings growth. While not immune, we believe the company is better positioned for an economic slowdown vs financials peers. Trading at 11.8x our 2013 EPS estimate, we find the shares attractive. We believe a 14.0x multiple is appropriate given the company’s spend-centric model (similar to payments companies) and a growing revenue contribution from lower-risk, higher-reward fee-based businesses. FY12E / 13E EPS $4.38 / $4.96 ahead of Street at $4.31 / $4.75, respectively."

For an analyst ratings summary and ratings history on American Express click here. For more ratings news on American Express click here.

Shares of American Express closed at $58.41 yesterday.

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