American Express (AXP): Initiated SELL $13 tgt - BofA

From Notable Calls

Bank of America is initiating American Express (NYSE: AXP) with Sell and whopping $13 tgt

- Number of factors will have a disproportionately negative impact on AXP’s near-term prospects. These factors include 1) the significant consumer and corporate spending slowdown, 2) the accelerated loan book growth over the past few years, 3) geographic and demographic risks embedded in current receivables and 4) upcoming funding and liquidity obligations needing to be addressed in a stressed capital markets environment.

- AXP’s “spendcentric” model is being tested given consumer & corporate distress, leading us to model a sharp decrease in billed business. The surprising deterioration in super-prime customers due to the housing meltdown factors into our outlook for accelerating chargeoffs. We look for 2009 EPS to fall 35% y/y to $1.58. Our forecast is $0.65 below the Street. Our 2010 EPS estimate is $2.97, $0.58 below the Street.

More calls at: http://notablecalls.blogspot.com/

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