American Express downgraded at Morgan Stanley after outperformance

As previously reported, Morgan Stanley analyst Jeff Adelson downgraded American Express (AXP) to Equal Weight from Overweight with a price target of $222, up from $212 as a new analyst assumed primary coverage. Following Q4 reporting, the firm is incrementally more bullish on prospects of a softer credit landing and identifies Ally (ALLY) and Discover (DFS) as two ways to play that theme. However, the credit cycle is not yet over, as net charge offs are set to rise though 2024, adds the analyst, who maintains an In-Line rating on the Consumer Finance industry. AmEx shares have outperformed peers since earnings, as management guided 2024 top-line growth above a slowdown investors feared, EPS guidance came in better-than-expected and the company raised its dividend by 17% in a sign of confidence, notes the analyst, who now sees good news baked into the price.