(CercleFinance.com) – American Express suffered the second biggest drop in the Dow Jones index on Tuesday morning on Wall Street, with Deutsche Bank now saying it sees limited appreciation potential on the stock.
At the end of the morning, the action of the credit card issuer lost 2.6%, while the Dow lost 0.9%.
While it says it considers AmEx to be the best positioned player in the sector and praises its long-term growth prospects, the broker believes that the potential for expansion in terms of valuation multiples is currently low.
He adds that the forecasts established by Wall Street seem ‘well calibrated’ to him at present and considers future upward revisions of the objectives unlikely.
Finally, Deutsche says it expects a slight deceleration in the growth of its activity during the first quarter.
‘We have the impression that if its performance turns out to be worse than expected, this will rekindle concerns around its forecasts, particularly given current valuation levels,’ he underlines.
The broker therefore downgrades its advice to ‘hold’ from ‘buy’ previously with a slightly improved price target, from 220 to 221 dollars.
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