Monday, FBR Capital Markets upgraded American Express Co. (AXP) shares to Market Perform from Underperform and increased its price target to $37 from $25.
Analyst Scott Valentin attributed the upgrade based on his belief that downside risk may be limited in the near term given substantially better-than-expected credit performance. Based on recent DQ and loss trends, the analyst believes that AXP would be first among peers to return to a normalized credit environment, likely as early as next year.
Additional favorable factors that influenced the analyst's rating change include benefits from a weaker U.S. dollar given AXP's larger international exposure, his belief that corporate spending and travel rebound will be sooner and more robust than general consumer spending, more robust than rebound in spending by high-net-worth consumers versus general population, and removal of overhang related to passage of interchange legislation.
Currently, AXP is up $0.90 or 2.58% and trading at $35.85.
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