American Express Stock Attractively Valued, Says Analyst

Baird upgraded four financial names after "relentless panic selling"

Digital Content Manager
Jun 17, 2022 at 9:25 AM
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American Express Company (NYSE:AXP) is up 0.3% at $137.85 this morning, following an upgrade from Baird to "outperform" from "neutral." The analyst also handed out upgrades to three other financial names, including Capital One Financial (COF) and Fifth Third Bancorp (FITB), noting that the "relentless panic selling" this sector has seen of late provides a solid buying opportunity. Baird also acknowledged the current macro backdrop, but said AXP and its three peers have valuations that reflect this. 

The panic selling noted by Baird has put AXP at a 16% year-to-date deficit, and sent the equity to its lowest level since March 2021 yesterday. Plus. the stock's 40-day moving average rejected a late-May rally attempt, while all other major moving averages still loom above as potential resistance as well. 

Analysts were split on the stock coming into today. Of the 15 in coverage, eight said "buy" or better, while seven said "hold." Meanwhile, the 12-month consensus price target of $197.20 is a 43.4% premium to last night's close.

Options traders have taken a more bearish stance. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AXP sports a 50-day put/call volume ratio of 1.47, which sits higher than 90% of readings from the past year. This implies options traders are picking up long puts at a much quicker-than-usual pace over the past 10 weeks. 

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.61 sits higher than 70% of all annual readings. In other words, short-term options traders are incredibly put-biased right now. 

 

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