American Express Down 2%; Bank of America Cuts to Underperform
September 23 2020 - 11:18AM
Dow Jones News
By Michael Dabaie
American Express Co. shares fell 2% to $96.32 in morning
trading.
Bank of America Global Research downgraded American Express to
Underperform from Neutral and lowered its price objective to $95
from $106.
Bank of America noted that it has been impressed by management's
execution and the company's resilience during Covid-19, but said it
is concerned about near-to-medium term billing volumes,
particularly airline and lodging spend.
"Travel spend could take some time to fully recover based on the
results of BofA's Proprietary Global Travel Survey and industry
commentary. AXP is over-indexed to travel and we think prolonged
travel spend weakness will weaken sentiment for the shares," Bank
of America said in the analyst note.
BofA sector analysts estimate it could be 2024 before spending
volumes on airlines and lodging are at 2019 levels, and a full
recovery is dependent on a vaccine being available and widely
administered, the analyst note said.
"This is consistent with results from our proprietary Global
Travel Survey...which suggests over a third of consumers are
waiting for a vaccine to be available before travelling
internationally and a significant portion are concerned about
getting on an airplane or staying in a hotel. As such, we think
travel could be an overhang for AXP billings growth over the
near-to-medium term," Bank of America said.
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
September 23, 2020 11:03 ET (15:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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