American Express stock rises to pace the Dow’s gainers after BofA backs away from bearish stance
Shares of American Express Co.
AXP,
rose 0.8% in afternoon trading Thursday, enough to pace the Dow Jones Industrial Average
DJIA,
gainers, after BofA Securities analyst Mihir Bhatia backed away from from his bearish view on the charge card and travel-related services company, citing a now “balanced” risk-reward profile. The stock has lost 4.6% since the end of July, while the SPDR Financial Select Sector ETF
XLF,
has gained 3.4% and the S&P 500
SPX,
has tacked on 1.4%. Bhatia attributed the stock’s recent underperformance to fears that the recent spike in COVID-19 cases would slow the economic recovery and hurt AmEx’s billings. “However, at a conference appearance this week, [AmEX] noted that [quarter-to-date] total billings are up 3% vs. 2019 levels (an acceleration from -2% in 2Q),” Bhatia wrote in a research note. “This was better than feared.” He added that while a slower recovery and higher corporate taxes are remain near-term risks, the company is likely to also benefit from increased travel spending, particularly by large businesses, in 2022.
