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Non-Tech : American Express (AXP)

AXP 360.73

+0.5%

Oct 31 9:30 AM EST

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From: Labrador	2/2/2005 11:54:25 AM
	of 179

Not a post in 2 years? I think that the spinoff of their financial advisory services will be a very good thing. I think that $65-$70/share within a year is a real possibility for the collective pieces. A.G. Edwards raised the price target for American Express (nyse: AXP - news - people ) to $68 from $64 and said the financial services firm's recently announced spinoff of its financial advisory unit "reflects the management's confidence about its competitive position." The research firm maintained a "buy" rating for American Express. "We believe that investors are likely to reward American Express with an improved valuation if the company can improve its return on equity and earnings growth outlook by properly executing its strategy of recruiting large bankcard issuers to issue American Express-branded cards," it said. "We continue to believe that the recent early success with MBNA (nyse: KRB - news - people ) can be replicated with other issuers such as Citigroup (nyse: C - news - people ), which is scheduled to issue American Express-branded cards later this year." The stock offers an "attractive risk-reward tradeoff," A.G. Edwards said, with growth in credit-card accounts accelerating, along with increased spending volume on the American Express payment network. A.G. Edwards said one "key risk," however, is a potential backlash from merchants concerned with the cost of accepting cards. "Given the relatively higher spending of American Express cardholders, we believe that the value proposition to its merchants remains strong and that the company can manage the inevitable longer-term pressure on its merchant discount rate."

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