American Express (NYSE:AXP) was raised to Neutral from Sell at Citi on Wednesday, with analysts lifting the price target on the stock to $154 from $143 per share.
In a research note, analysts noted that spending growth is slowing, but other growth drivers are picking up the slack.
"While we’ve seen modest slowing in spend growth, the overall spending levels remain healthy, NII and card fees are growing better than expected, and credit still remains well below pre-pandemic levels," they explained.
"While we continue to view 10%+ top line growth for 2024 (AXP’s aspirational target), shares pulled back recently putting less downside risk on the shares in our view," they added. "Credit quality has been much more resilient than we expected, particularly when comparing to other credit card issuers in our coverage reflecting the lack of inflation impact on the high-end consumer."
With stronger loan growth and related NII, continued strong card fee growth, and lower credit loss assumptions, the investment bank said it now sees moderate upside to AXP shares.