American Express Co.
) or AmEx increased 2.1% to $83.95 as of Nov 21, following the
company's announcement that it will now be accepted on
) credit card platform.
Per agreement, U.S. Bank will issue credit cards that are
accepted on AmEx's card network. Effective post-Jun 2014, the
alliance will allow AmEx-branded credit cards to be accessed
across 3,088 branches of the U.S. Bank. These cards will also be
available online and on mobile devices of all the U.S. Bank
The alliance marks AmEx's efforts to step up its credit card
network. As the largest issuer of credit and debit cards, U.S.
Bank is renowned for the rewards and discounts offered on its
cards to its customers. U.S. Bank also enjoys association with
superior brands across the nation, which will in turn enhance the
credit card experience of AmEx cardholders.
Such alliances not only support AmEx's growth strategies but
also boost its market presence. The latter is particularly
significant in order to gain edge in an industry characterized by
intense competition. In this regard,
Wells Fargo & Co.
) also partnered with AmEx to offer credit cards on the latter's
card network in Aug 2013.
Cards-in-force improved 8% in the U.S. at the end of Sep 2013.
Going ahead, the addition of U.S. Bank and Wells Fargo will
further escalate the company's credit card spending, which is a
primary revenue growth driver for AmEx.
AmEx's operations are based on a spend-centric business model.
We believe that improved credit trends, new business initiatives,
capital flexibility and stable ratings bode well for the
company's long-term growth.
AmEx presently carries a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the financial sector include
Euronet Worldwide Inc.
FleetCor Technologies Inc.
). Both these stocks carry a Zacks Rank #1 (Strong Buy).
AMER EXPRESS CO (AXP): Free Stock Analysis
EURONET WORLDWD (EEFT): Free Stock Analysis
FLEETCOR TECH (FLT): Free Stock Analysis
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
To read this article on Zacks.com click here.