American Express experienced a decline in its stock price on Thursday following a rating downgrade by a Wall Street firm. Several analyzers lowered their rating on American Express stock from Outperform to Neutral/high risk. This change comes after maintaining the Outperform rating for over a year. Despite the downgrade, Baird kept its price target for the stock at $185, indicating a minimal gain of 6% based on the previous day's closing price.
The rationale behind the downgrade is partly based on the net interest margin, which represents the difference between the interest income generated and the interest paid by the company to lenders. The expectation is that American Express's net interest margin will be weaker compared to broader estimates for the second quarter. This is primarily attributed to a shift in the funding mix and rising deposit costs.
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The rationale behind the downgrade is partly based on the net interest margin, which represents the difference between the interest income generated and the interest paid by the company to lenders. The expectation is that American Express's net interest margin will be weaker compared to broader estimates for the second quarter. This is primarily attributed to a shift in the funding mix and rising deposit costs.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.