American Express Stock Boosted by Bull Note

AXP options can be had for a bargain at the moment

Deputy Editor
Jul 6, 2021 at 9:37 AM
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The shares of American Express Company (NYSE:AXP) are up 1.1% to trade at $170.29, after Goldman Sachs hit the blue-chip credit card giant with a generous bull note. The brokerage firm upgraded AXP to "buy" from neutral, with a price target of $225, noting it expects American Express to benefit from accelerating consumer spending amid continued economic recovery. 

What's noteworthy about this upgrade is the overall analyst sentiment. Coming into today, nine of the 17 in coverage of AXP rated it a "hold" or worse. Plus, the 12-month consensus target price of $158.22 is an 8.6% discount to last Friday's close of $168.50. 

American Express stock has steadily climbed on the charts since a November 2020 bull gap cleared triple digits. Guided higher by its ascending 40-day moving average -- a trendline that's been breached on a closing basis only once since February -- the shares scored a June 25, all-time high of $170.41. Year-over-year, the equity is up 78.6%. 

An unwinding of pessimism in the options pits could also put more wind at the security's back, as AXP's Schaeffer's put/call volume ratio (SOIR) of 0.97 stands in the relatively low 17th percentile of its 12-month range. This indicates short-term options traders have rarely been more put-biased of late. 

And now looks to be an affordable time to jump on the options bandwagon, too. American Express stock's Schaeffer's Volatility Index (SVI) of 19% sits in the lowest percentile of all other readings from the past year -- a boon for premium buyers.

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