Normally, there are two brands that come to mind when people think about credit cards, and American Express (NYSE:AXP) generally isn’t one of them. However, investors clearly had American Express on their minds today, giving the stock’s price a healthy bump up in Friday afternoon’s trading.
So what happened to give AXP a little extra life? A report from Morgan Stanley by way of analyst Betsy Graseck did the job. Graseck noted that a recent hefty selloff of American Express in recent days has improved its position, making it a good time for investors to get in. Now, Graseck further noted, shares are “…trading at the lowest PE multiple since 2019.” Granted, American Express’ revenue growth isn’t quite as vibrant as it was back in the pandemic days, but it’s nowhere near as big a drop-off as some were afraid of, even with negative macroeconomic conditions dragging on the sector in the background.
It also didn’t hurt matters that American Express is still bringing in new cardholders. A rising tide of customers from the Millennial and Gen Z generations also helped pick things up, which makes sense as these generations will soon have the whip hand when it comes to disposable income. Throw in a recent relaunch of the American Express Green Card, complete with a new and augmented welcome bonus, and things only look better from there.
Analysts, however, are skeptical. In fact, they’re sufficiently split—six Buy ratings, five Holds, and three Sells—to make American Express stock rated a Hold overall. Further, with an average price target of $174.23 per share, American Express stock offers its investors 10.84% upside potential.
