American Express seen rebounding as BMO starts coverage with outperform rating

Traders Union
All News
Financial News
American Express rebound outlook

Highlights

BMO Capital Markets initiated American Express with an outperform rating and a $380 price target, suggesting about 24% upside from Thursday’s close.
Analyst Andrew Bauch highlights American Express' growing premium ecosystem, fee revenue compounding, and forecasts billed business growth 1 to 2 points above Wall Street expectations over two years.
Despite shares being down 17% in 2026 due to cost and macro concerns, BMO believes increased operating investment will enhance growth and notes 17 of 32 analysts rate the stock a buy or strong buy.

BMO backs premium card growth thesis

As reported by CNBC, BMO Capital Markets initiated coverage on American Express with an outperform rating and a $380 price target, implying about 24% upside from Thursday’s close.

In a Friday note to clients, analyst Andrew Bauch says concerns about premium card competition and elevated reinvestment miss a more important shift, that American Express’ premium ecosystem is still gaining scale as younger customers adopt fee-paying products and card-fee revenue continues to compound. He says management’s reinvestment strategy is delivering healthy returns and describes the company as one of the most durable revenue and earnings growth compounders in BMO’s coverage.

Bauch also says the company is spending into a reinforcing model in which card fees, retention, engagement, merchant relevance and closed-loop data support one another, while strengthening its differentiated membership rewards ecosystem. He adds that these dynamics are expected to support billed business growth by 1 to 2 points above broader Wall Street expectations over the next two years.

Cost concerns remain, but analyst sees upside

American Express shares are down about 17% in 2026 as investors react to rising operating costs and worries that macroeconomic and geopolitical uncertainty could pressure cardholder spending.

BMO argues that the recent increase in operating investment is more likely to strengthen growth than limit it. The call is broadly in line with wider market sentiment, with LSEG data showing that 17 of 32 analysts covering the company have a buy or strong buy rating, while 15 rate the stock a hold.

Our earlier article on Cboe Global Markets’ renewed long-term S&P 500 index options agreement explained how the contract extension helped remove a major overhang and prompted Morgan Stanley to upgrade the stock and raise its price target. We also noted that stronger options volumes, improved capture, and potential upside from new prediction-market products were key drivers behind the more optimistic earnings outlook.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.