BofASecuritiesanalystKennethBrucedowngradedAmericanExpressCo(NYSE:AXP)fromBuytoNeutralwithapricetargetof$263.Thestockpriceslidafterthererating.

Giventhepotentialforsubduedbillingsvolumegrowthandcurrentpremiumvaluation,Bruceseeslimitedincrementalupsideforthestock.

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WhiletheanalystmaintainedafavorableviewofAmericanExpress'slong-termexecutionandstrategy,recentcommentaryfromretailersandtravelcompaniessuggeststhespendingbackdropischallenging,evenforthehigh-endconsumer.

Commentaryfromothercompanies,includingVisaInc(NYSE:V)suggestedcontinuedpressureontheU.S.consumer,Bruceflagged.

SeveralluxurybrandsslashedtheirguidancefortheyearasthepersistentinflationandthehigherrateenvironmentimpactedU.S.consumerdemand.

Brucealsohighlightedmultipleleisureandtravelbrands,suchasMarriott,ParkHotels,andHostHotels,reducingtheirguidance.

Inasoft-landingbackdrop,Brucepredictedupsidepotentialincredit-sensitiveissuerslikeSynchronyFinancial(NYSE:SYF)andCapitalOneFinancialCorp(NYSE:COF).

Thesecompaniestradeatalowerprice-to-earningsmultiplerelativetoAmericanExpressandarelikelytoseemoresignificantimprovementsinsentiment.

Inachallengingspendingbackdrop,theanalystnotedlesspotentialforAmericanExpresstodeliverfiscal2024top-linegrowthatorabovethehighendofits9%-11%revenuegrowthguidancerange.

AmericanExpressistradingat17xfiscal2025EPS,apremiumtothe14xhistoricalmultiple,offeringonlya4%upsidetoBruce'spricetarget.Thoughtheanalystnotedthepremiumasjustifiedgivenafastergrowthalgorithmandbettercredit-profileversuspeers,heexpectedmultipleexpansionstobecomplexinamorechallengingbackdrop.

PriceAction:AXPstocktradedlowerby3.40%at$244.54atthelastcheckonWednesday.

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AmericanExpressAnalystsBreakDownCreditTrends,FutureRevenueSurge

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