BofA reiterates Buy on American Express stock, $381 target By Investing.com

BofA Securities reiterated a Buy on American Express with a $381 price target, but said March operating results were a modest negative overall. Loan growth slowed by 20 bps year over year, the loss rate rose more than usual seasonally, and March quarter delinquency/write-off data showed U.S. consumer card loans at $97.5B with delinquencies flat at 1.4% and net write-offs up to 2.2% from 2.0%. The company also launched an AI agent-powered commerce developer kit, adding a positive product/technology angle ahead of April 23 results.

Analysis

AXP is in the awkward middle of the credit cycle: the market is paying for premium spending resilience while underwriting data is starting to confirm a softer marginal borrower. The key second-order issue is that slowing loan growth plus a slightly higher loss rate usually compresses future fee/interest mix before it shows up in reported earnings, so the risk is less a one-quarter miss and more a gradual de-rating if management cannot reaccelerate billings quality.

The AI-commerce announcement is strategically interesting but probably not an immediate P&L driver. The near-term upside is distribution and data, not monetization: if AXP becomes a transaction layer for agentic shopping, it can defend relevance with merchants and issuers, but the more likely first-order benefit accrues to the network and partner ecosystem rather than revenue today. That said, if this lowers friction for small-ticket and repeat transactions, it could partially offset the current moderation in small-business growth over the next 2-4 quarters.

JPM’s stronger consumer-spend read is the main bull case counterweight, but the market may be overestimating how quickly broad spending momentum flows through to AXP versus more cyclically exposed peers. AXP typically benefits when affluent discretionary demand holds up, yet its credit optics can deteriorate later than spend data, so the stock can look cheap right before the denominator starts to turn. The contrarian view is that consensus is treating this as a clean “quality consumer” compounder while the setup is actually a late-cycle cashflow story with a premium multiple that is vulnerable if underwriting trends keep drifting worse.

Key Decisions for Investors

• Hold a tactical short AXP into the next earnings window (pre-4/23), targeting a 2-4 week horizon; risk/reward favors downside if management commentary confirms slower billings and continued pressure in losses.
• Use a bearish put spread in AXP for downside convexity rather than outright short stock; structure around the earnings date to cap theta bleed while expressing a 5-10% post-print downside scenario.
• Pair long JPM / short AXP for the next 1-2 months: if consumer spending is holding but AXP credit metrics lag, the pair isolates relative quality of deposit/consumer franchises versus premium-card credit sensitivity.
• If AXP drops on the print but billings commentary remains resilient, fade the selloff with a short-dated call spread; the trade works only if the market is discounting too much credit noise versus earnings durability.