By Dhirendra Tripathi
Investing.com – American Express (NYSE:AXP) was up 2.5% in Tuesday’s premarket trading as Goldman Sachs (NYSE:GS) upgraded the stock to ‘buy’ with a $225 target, arguing that the credit card company “is poised to exceed its original 2020 expectations by 2022”.
Analyst Ryan Nash’s latest target for American Express is 33.5% higher than the stock’s Friday closing of $168.50.
The credit card issuer had in January talked about “returning to the original EPS expectations ($8.85-$9.25) we had for 2020 in 2022.”
According to Nash, improving SME spend and benign credit should drive upside to those expectations.
“In fact, we believe American Express has the potential to see ~$10.00 in EPS in 2022 and double digit growth beyond then as the multi-year recovery in T&E (travel and entertainment) as well as robust growth in Goods & Services makes up for "lost ground" in 2020,” the analyst wrote.
American Express has typically depended to a large extent on business travel and hospitality spending, both of which were crippled by the pandemic but are now rebounding.