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Key Takeaways
- Bank of America analysts increased the price of American Express on Friday. The analysts said that American Express could be resilient during a recession.
- The company's "high-quality customer base should drive more durable earnings while keeping credit losses in-check," the analysts wrote.
- The analysts called the stock's 15% decline since the start of 2025 a chance to buy "a high-quality company at a reasonable valuation."
Bank of America analysts upgraded American Express stock (AXP) to a “buy rating” on Friday. They said the credit card company should be resilient during a possible recession or downturn.
They upgraded the shares, but reduced their price target from $325 to $274 to reflect lower revenue and earnings estimates as they expect consumers to slow down.
Bank of America is now one of six "buy" ratings among the 13 analysts tracked by Visible Alpha, along with five "hold" and two "sell" ratings, while its price target is now below the $308.67 consensus. Stocks were up 2% in late trading on Friday.
Amex Benefits from 'High-Quality Customer Base'
"The macro environment is uncertain and GDP growth is likely slowing," the analysts wrote. "This is a headwind for revenue growth. But we think Amex's high-quality customer base should drive more durable earnings while keeping credit losses in-check."
American Express shares have lost about 15% since the start of the year, which the analysts said "offers long-term oriented investors an opportunity to buy a high-quality company at a reasonable valuation."
The analysts noted that in prior downturns like the COVID pandemic and the first Trump administration's trade war, American Express stock "outperformed not only other card issuers but also the S&P 500."
The card issuer is set to report first-quarter earnings on Thursday, and Bank of America analysts said the company's outlook for the rest of 2025 will likely be more important than whether its first-quarter results beat or miss estimates.
American Express’s results were in line last quarter with the estimates of executives who said that holiday spending was strong.
