American Express Sees Second Downgrade In Two Days
NEW YORK (TheStreet)--American Express(AXP) received its second downgrade in as many days , as analysts at JPMorgan fear tax hikes to its high end customers will cause them to reduce spending, among other factors.
JPMorgan analyst Richard Shane lowered his recommendation to underweight from neutral, arguing the high end credit card lender is "in a challenging position in terms of regaining operating leverage." The note, part of a 2013 preview, warned of increasing competitive pressures and "few near-term catalysts for the stock."
Shane listed Capital One Financial(COF) as his "top pick," arguing its multiple is under pressure both historically and versus peers but will recover as investors grow more confident in its earnings following acquisitions of online bank ING Direct and HSBC(HBC) 's U.S. Credit Card portfolio. The analyst also expects increased dividends and buybacks from Capital One.
The JPMorgan downgrade follows one by Goldman Sachs analyst Ryan Nash on Monday, also part of his 2013 sector preview. Nash also favors Capital One, which he upgraded to buy.
-- Written by Dan Freed in New York.