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Analysts Upgrade American Express Stock Amid Economic Concerns

Resilience in a Changing Economy

On Friday, analysts from Bank of America announced an upgrade of American Express (AXP) stock to a “buy” rating, citing the credit card issuer’s potential resilience during economic downturns or recessions. They believe that the company’s strong, loyal customer base will contribute to more consistent earnings while maintaining control over credit losses.

Adjusted Price Target Reflects Market Conditions

Despite the upgrade, the analysts lowered their price target for the stock from $325 to $274. This adjustment reflects a cautious outlook on revenue and earnings, as they anticipate a slowdown in consumer spending as the economic landscape shifts.

Within the landscape of 13 analysts monitored by Visible Alpha, Bank of America is part of a select group endorsing a “buy” rating, with six such ratings compared to five “hold” and two “sell” recommendations. Currently, the market shows the stock trading at approximately $252, a 2% increase during late trading hours on Friday.

Strength in Customer Demographics

The analysts highlighted that while the macroeconomic environment remains uncertain and GDP growth appears to be decelerating, they believe that American Express’s high-quality customer demographic will lead to stable earnings and minimized credit risks. They noted that this robust customer base positions the company favorably, even amid challenges.

Market Performance Insights

Since the beginning of the year, American Express shares have experienced a decline of around 15%. However, analysts view this as an attractive entry point for long-term investors looking for a quality investment at a compelling valuation.

Historically, American Express has demonstrated resilience during economic hardships, such as the COVID-19 pandemic and the trade turbulence experienced during the early years of the Trump administration, consistently outperforming not only its peers in the credit card sector but also the broader S&P 500 index.

Looking Ahead to Earnings Reports

As American Express prepares to release its first-quarter earnings on Thursday, the focus of analysts will likely shift towards the company’s future outlook for 2025. They emphasize that this forward-looking perspective may be of greater significance than the immediate financial results.

In the previous quarter, American Express reported earnings that met market expectations, with executives noting strong consumer spending figures during the holiday season, signaling lasting engagement from their customer base.

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