BMO Capital raises American Express estimates on lower costs

BMO Capital keeps an Underperform rating and $176 price target on American Express but also raises its 2024 EPS view by 22c to $12.42 after its Q2 earnings beat. The company’s lower credit and operating costs more than offset its lower net interest income, though its network growth is still moderating, led by big-ticket spending categories like airlines and lodging, the analyst tells investors in a research note. Concerns regarding credit quality, loan loss reserve adequacy, decelerating spending growth, rising consumer engagement costs, and valuation, which prompted the firm to downgrade the stock at the start of 2024, have endured, BMO adds.