Citigroup Analyst Sees Limited Near-Term Upside for American Express Despite Positive Long-Term Outlook – Here's Why What's Happening With American Express Stock Tuesday? -American Express (NYSE:AXP)

Citi Group analyst Keith Horowitz initiated coverage on American Express Co. (NYSE: AXP) Monday with a Neutral rating and a $250 price target.

American Express presents the principles of an attractive long-term core stake, given the combination of an attractive business model in a growing market led by a strong management team, Horowitz said.

But from a tactical standpoint, the analyst didn't see outsized near-term upside potential to warrant a buy rating, as he noted that the valuation multiple has been set quite high. The stock is trading lower on Tuesday.

The analyst's EPS estimates are slightly above consensus (VisibleAlpha), but he set them differently. Lower revenue (primarily due to other fees, followed by NII revenue and discounts) offset lower expenses, as he noted that American Express has the flexibility to meet its EPS growth target of around 15% in the short and medium term.

Recent reports indicated EBay Inc. (NASDAQ: EBAY) plans to remove American Express cards from its platform due to exorbitant fees.

In April, American Express reported first-quarter revenue growth (net of interest expense) of 11% year-over-year to $15.80 billion, slightly beating analysts' consensus estimate of $15.79 billion. dollars. EPS of $3.33 beat analysts' consensus estimate of $2.95.

Price action: AXP shares are trading down 2.78% at $225.98 at last check Tuesday.

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