Management At American Express Has A Plan To Tackle Its Competitive Pressures

KBW maintains its Market Perform rating on American Express Company (NYSE: AXP) after management, in meetings with the brokerage, displayed increased conviction that its strategy remains an optimal position.

"Overall, thematically the focus was on the long-term positioning for American Express in an increasingly competitive environment and whether or not the company can maintain or take share while achieving appropriate returns," analyst Sanjay Sakhrani wrote in a note.

Management wants to encourage growth using competitive advantages. These include:

• Its closed-loop network.
• Enhancing customer service and experience.
• Providing more lending products to existing customers.

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"However, it was clear that this is a process that will take some time to play out and there is no real silver bullet," Sakhrani continued.

The analyst stated that the stock is cheap if it manages to grow sales in the mid-single digits or greater. However, he acknowledged there is some execution risk.

"We will be on the lookout for any evidence that tangible traction is being made to get more constructive on the shares," Sakhrani added.

The analyst has a price target of $74 on the stock, which is currently down 1.34 percent to $65.35.

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