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American Express cut to Equal weight at Barclays as risk/reward balances (NYSE:AXP)
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- American Express (NYSE:AXP) stock slipped 1.0% in Tuesday premarket trading after Barclays downgraded the credit card stock to Equalweight from Overweight after its stock has rallied 43% since November 2023.
- While analyst Terry Ma considers AXP to be the best card issuer in the credit card sector and is positive on the company’s long-term growth prospects, its risk/reward profile has come into better balance.
- The analyst cites three reasons for the rating action: upside from further multiple re-rating is limited; Street EPS estimates appear well-calibrated, making material upward EPS revisions appear unlikely; and Barclays models a moderate deceleration in revenue growth into Q1 2024.
- “We see risk that if revenue comes in worse than expected, it will reinvigorate questions about the guide, particularly at the current valuation,” Ma wrote in a note to clients.
- The Equalweight rating agrees with the SA Quant rating of Hold and diverges from the average Wall Street rating and the average SA Analyst rating, both at Buy.
