American Express’ stock had a great run in 2024, but analysts at Bank of America Securities (BofA) believe the company’s shares don’t have much room to grow.
In a note shared with clients on Wednesday, BofA’s analysts, led by Mihir Bhatia, downgraded Amex’s stock from “Buy” to “Neutral” while keeping the price target at $263 per share. Investors took note, sending the stock down by 2.68%.
Bhatia and his colleagues predict that Amex’s business will take a hit from a slowdown in consumer spending.
“We see limited incremental upside given the potential for subdued billings volume growth and current premium valuation. While we maintain a favorable view of Amex’s execution and strategy long-term, recent commentary from retailers and travel companies suggests the spending backdrop is challenging, even for the high-end consumer,” the note said.
BofA’s analysts still believe that Amex’s full-year targets for revenue and earnings per share (EPS) are within reach but expect them to come at the low end of the forecast. In its most recent quarterly report shared in July, Amex said it expects its full-year EPS to come between $13.30 and $13.80 compared to previously expected $12.65 to $13.15.
After BofA’s downgrade, Amex’s shares dropped to close at $246.30. The stock still remains up 30.79% year-to-date.