Analyst Targets 20% Upside for Surging Dow Stock

AXP stock hit a record high out of the gate

Sep 17, 2018 at 9:37 AM
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Stephens upgraded American Express Company (NYSE:AXP) to "overweight" from "equal weight," and boosted its price target to $131 from $109 -- a nearly 20% premium to last Friday's close at $109.56. The analyst in coverage waxed optimistic on the financial firm's engagement with merchants, and said its Amex Offers creates "key upside."

Out of the gate, AXP shares are up 0.6% at $110.14 -- a new record high. The Dow stock is up more than 25% since its mid-February year-to-date lows near $87.50, with its 200-day moving average working as a springboard. Plus, today's early pop brings the security's year-to-date lead to almost 11%, and puts it on track for a sixth win in seven sessions.

Nevertheless, analysts remain skeptical of the Dow stock, with the majority of those in coverage maintaining a lackluster "hold" recommendation. Plus, the average 12-month price target of $113.16 is a slim premium to current trading levels.

Options traders have been unusually bearish toward American Express stock, too. The equity's top-heavy 10-day put/call volume ratio of 2.23 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 90th annual percentile.

Specifically, the weekly 9/28 104-strike put has seen the biggest increase in open interest over this two-week time frame, with nearly 2,600 contracts added. Data from Trade-Alert indicates most of these puts were bought to open last Tuesday, Sept. 11, meaning speculators expect AXP stock to sink back below $104 by expiration at the close next Friday, Sept. 28.

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