American Express: Morgan Stanley downgrades stock

(CercleFinance.com) - On Thursday Morgan Stanley downgraded American Express shares from 'overweight' to 'equal weight', albeit with a target price raised from $212 to $222 (cp: $211, +1%), believing that good news around the stock is now priced in.


In a sector repoort, the broker points out that AmEx shares have outperformed their peers by 11% since its quarterly results.

A discrepancy that the analyst explains by the prospect of business growth in 2024, whereas investors feared on the contrary a contraction in revenues this year.

But the hardest part is yet to come, Morgan Stanley warns, which believes that the American issuer will have to prove that it can accelerate growth in its main line of business, cash-back credit cards (55% of annual revenues in 2023), after a slowdown throughout fiscal 2023.

With the stock now trading above its historical average, in this case a P/E of 16x, Morgan explains that it prefers to steer clear from the stock for the time being.


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