American Express: Upgrading To Buy Ahead Of Earnings

American Express Company is upgraded to Buy ahead of Q2 earnings, driven by robust consumer spending and improving credit trends. Sequential acceleration in billed business and plummeting delinquencies signal strong underlying credit quality and operational momentum for AXP. Guidance for 9-10% revenue growth and EPS of $17.30-$17.90 appears achievable, with potential for a 3% EPS guidance raise post-Q2. AXP’s operational outperformance and mid-30s ROE justify a higher multiple; I set a $422 price target, implying 21% upside.

We are just under a few weeks away from American Express Company (AXP) reporting their second quarter earnings on July 24th. It's largely been smooth sailing for AXP stock over the last few months.