American Express: BofA downgrades its opinion to 'neutral

(CercleFinance.com) - Bank of America announced on Wednesday that it had downgraded its opinion on American Express shares from 'buy' to 'neutral', with the target price maintained at 63 euros.


In a research note, the broker explains that the valuation premium on which the credit card issuer trades on the stock market deserves more than just a good ability to execute in view of the current slowdown in consumer spending.

The broker now explains that it sees more limited upside potential in a context of weak growth in spending by the financial services group's customers.

BofA points out that the latest consumer spending surveys have been lacklustre, meaning that AmEx's sales growth is likely to be at the lower end of the group's target range of 9% to 11% this year.

Assuming a soft landing for growth, the professional says he prefers stocks with greater exposure to the credit sector, such as Capital One, where he sees more potential in terms of multiple revaluation.

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