Barclays Maintains an 'Overweight' on American Express (AXP); Charge-offs Solid; Spend Could Be Light

Barclays maintains an 'Overweight' on American Express (NYSE: AXP) price target of $60.00.

Barclays analyst says, "AXP reported September managed credit data that showed an uptick in delinquencies in-line with seasonal trends, an impressive decline in charge-offs, and a dip in loan balances. More importantly, our read-through of billed business came in lighter than expected at 8.4% y/y growth, which resulted in a three-month average of 11% compared to our 3rd quarter U.S. card billed business estimate of 12.5%. Though our billed business measure (based on trust data) isn't a perfect proxy for AXP's U.S. spend trends, it has been directionally reliable in the past (see Figure 1), suggesting that U.S. growth could be slowing from its impressive level the past few quarters. We remain comfortable with our 3Q11 EPS estimate of $1.01, but would not be surprised if revenue is slightly lighter (from less spend) and provisions lower (from the decline in NCOs) vs. our projections."

For more ratings news on American Express click here and for the rating history of American Express click here.

Shares of American Express closed at $45.12 yesterday.

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