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Shares of American Express Co. rose 0.7% toward a record close in midday trading Tuesday, after Goldman Sachs analyst Ryan Nash turned bullish on the financial and travel services company, citing expectations of a “big pickup” in consumer spending. The stock was the biggest advancer among the three of 30 Dow Jones Industrial Average members gaining ground. Goldman’s Nash upgraded AmEx to buy from neutral, as his $225 stock price target implied a near-33% gain from current levels. While AmEx (AXP) has laid out expectations to reach its original goals for 2020 in 2022, with the economy improving meaningfully and “a big pick-up in consumer spending” since AXP gave this guidance in January 2021, he believes the company is poised to exceed its original 2020 expectations of earnings per share of $8.85 to $9.25 by 2022, given accelerating consumer spending, improving small and medium business spending and benign credit. “In fact, we believe AXP has the potential to see ~$10.00 in EPS in 2022 and double-digit growth beyond then as the multi-year recovery in [travel and entertainment] as well as robust growth in goods and services makes up for ‘lost ground’ in 2020,” Nash wrote in a note to clients. The stock’s gain comes as the SPDR Financial Select Sector ETF slumped 1.7% in midday trading and the Dow dropped 367 points, or 1.1%. The stock last closed at a record of $169.45 on June 25.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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