With the holiday shopping season now largely in full swing and its ultimate day—Black Friday—mere days away, a new report from credit card giant American Express (NYSE:AXP) has bolstered its fortunes a bit. It’s up fractionally in Monday morning’s trading, thanks to new word about how customers can use their rewards points.
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Amex is now letting eligible cards—those with cash-back options, at last report—use their Reward Dollars on Amazon (NASDAQ:AMZN). They can even do so with no loss of value, as the Reward Dollars will have the same value as if they were being redeemed as a statement credit. Thus, one Reward Dollar becomes one actual dollar on Amazon. Those interested need only link an Amex card to their Amazon accounts and then choose the option “Reward Dollars” as their preferred method of payment. The Reward Dollars will then cover as much of the purchase as they’re able before switching over to conventional dollars if there’s any balance remaining.
Amazon Reward Dollars May Help, but is It Enough?
We know that the American consumer has been somewhat “on the ropes” lately, with ongoing inflationary pressures prompting concerns about household finances. In fact, one report from LendingClub revealed that 60% of American adults are living “paycheck to paycheck,” which is about the same amount as reported in 2022. Further, four in 10 consumers believed that they were worse off this year than they were last year. Nevertheless, most people in the survey expect to overspend for the holidays—a whopping 96%—while only 23% have plans to pay off any debt incurred for the holidays within one or two months. While the draw of Reward Dollars used like cash on Amazon may help, still-high inflation may not make that move as effective as it might have been five years ago.
What is the Future of AXP Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AXP stock based on nine Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After an 8.48% rally in its share price over the past year, the average AXP price target of $176.38 per share implies 7.98% upside potential.
