© Reuters. American Express (AXP) shares ‘should be sold as a source of funds’ – Baird
Shares of American Express (NYSE:) have declined just over 1% premarket after the stock was downgraded to Underperform from Neutral by Baird on Monday. Analysts at Baird maintained a $190 price target on the shares.
The firm is getting “incrementally more cautious” on credit card stocks after they outperformed the broader market in recent months along with the bank group.
The outperformance came about as “funding concerns were largely non-existent, and these companies were a small few able to generate loan growth,” analysts explained.
“Market participants have also become more comfortable with the notion of a soft landing,” they added. “While AXP isn’t especially expensive, we see relatively little upside from here and believe it should be sold as a source of funds here.”
Baird expects unemployment and subsequent card losses to mean revert over the coming quarters. They also expect top-line growth to moderate as the benefit of the inflation tailwind subsides.
