Credit card issuer American Express Company (
) on Tuesday caught downgrades from two different analysts on the
heels of today's announcement of a Department of Justice lawsuit
against the company.
The lawsuit alleges that American Express used anti-competitive
business practices with its merchants, in attempts to discourage
customers from using non-AmEx credit cards.
Analysts at FBR Capital markets cut their price target for AXP
to $45 on the news. That new target represents a smaller expected
upside of 15% to the stock's Monday closing price of $39.05.
Meanwhile, Morgan Stanley cut its earnings estimates through
2012 for AXP, noting the company may be required to lower its U.S.
credit card merchant discount rate. Still, the analyst maintained
its "Overweight" rating and $52 price target on the stock.
American Express shares rose 40 cents, or +1%, in premarket
The Bottom Line
Shares of AXP have a dividend yield of 1.84%, based on last night's
closing stock price of $39.05. The stock has technical support in
the $36 price area. If the shares can firm up, we see overhead
resistance around the $42-$44 price levels. We would remain on the
sidelines for now.
American Express Company (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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