Financial services firm American Express Company (AXP) is facing some near-term headwinds, according to analysts at JP Morgan. Even though JP Morgan raised the price target on AXP, the analysts still see a downside to the stock.
The analyst rate AXP as “Underperform” and see shares reaching $63, up from the previous target of $61. Despite the increased price target, it still suggests a 3.5% downside to Tuesday’s closing price of $65.29.
JP Morgan analyst Richard Shane commented, “We view AXP to be in a challenging position in terms of regaining operating leverage, with obvious near-term hurdles looming (competitive pressures and slowing macroeconomic trends). We believe Y/Y spending comps will be increasingly tough, based on our thesis that confidence among higher end consumers is disproportionately at risk due to policy initiatives strongly favoring middle income consumers. While it takes time for the company to see results of new alternative payments initiatives, we see few near-term catalysts for the stock.”
American Express shares were up a fraction during pre-market trading on Wednesday. The stock is up +22.73% over the past year.
The Bottom Line
Shares of American Express (AXP) have a dividend yield of 1.23% based on last night’s closing price of $65.29 and the company’s annualized dividend payout of 80 cents per share.
American Express Company (AXP) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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