Nomura Says Housing Recovery will Help American Express (AXP)

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Credit card issuer American Express Company ( AXP ) on Monday caught some additional bullish commentary from analysts at Nomura Securities.

The firm reiterated its "Buy" rating on AXP as well as its $69 price target, which suggests an 18% upside to the stock's Friday closing price of $58.56.

A Nomura analyst commented, "Conventional wisdom holds that AXP's billings growth is largely driven by spending at high-end retailers. While a relationship does exist, we remind everyone that correlation does not imply causation. In reality, AXP's billings are directly driven by other variables, including consumer confidence and overall changes in net worth (a.k.a. wealth effects)."

Continuing, "Changes in net worth are largely explained by changes in housing prices and stock market valuations. If the consensus view that housing prices have bottomed is right, we expect AXP billings to enjoy a meaningful source of downside support."

American Express shares were mostly flat in premarket trading Monday.

The Bottom Line
Shares of American Express ( AXP ) have a 1.31% dividend yield, based on Friday's closing stock price of $58.56. The stock price has technical support in the $54-$56 price area. The shares are trading near all-time highs.

American Express Company ( AXP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Stocks
Referenced Stocks: AXP


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