Why American Express Company Will Keep Charging in 2014

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of American Express Company (NYSE: AXP  ) gained 1.5% this morning after Morgan Stanley upgraded the credit card giant from Neutral to Overweight.

So what: Along with the upgrade, analyst Betsy Graseck raised his price target to $100 (from $90), representing about 15% worth of upside to yesterday's close. While contrarians might be turned off by Amex's solid share-price over the past year, Graseck thinks there's more room to run given the strong tailwinds -- growth potential of OptBlue and the improving economy -- working in its favor.

Now what: According to Morgan, Amex's risk/reward trade-off is pretty attractive at this point. "We believe Amex can win over small merchants with its OptBlue program, boosting US acceptance closer to [Visa (NYSE: V  ) /MasterCard (NYSE: MA  ) ]," noted Graseck. "Look for 7%/14% rev/EPS CAGR through 2016 as Amex takes share." When you couple that positive outlook with Amex's seemingly reasonable forward P/E of 14, it's tough to disagree with Morgan's upgrade. 

More compelling income opportunities
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2832075, ~/Articles/ArticleHandler.aspx, 3/28/2015 7:58:03 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...