American Express (AXP) Bull Bear Case

BULL/BEAR CASE EXPRESS AERICAN ৯ bl007 EXPRESS 58 AMERICANN UM 3713 3713 8 b1007 58 HL CLARK HL CLARK BULLISH BEARISH EPS will expand to $5.6 in FY14. Using a multiple of 16x*, AmEx will be valued at $90. EPS will shrink to $5.10 in FY14. Using a P/E multiple of 13X*, AmEx will be valued at $66. Assumptions: Margins will expand as a result of cost-cutting and restructuring measures, while total billed business in North America and Assumptions: A slight downturn in the global economy will negatively impact global card revenues and affect passenger travel. Slowing growth in international markets will have a emerging markets will continue to grow at favorable rates into FY14. negative impact on earnings. Travel commissions will grow as a result of increased business activity and leisure spending, and growing revenues from corporate cards and small business accounts will Tightening of credit policies will affect credit card growth, and a continued slowdown will affect interest income and net card fees. increase earnings. An SEC investigation into the company's practices in its credit card segment, and possible litigation and fines could negatively impact earnings. Revenues from new partnerships and increased cardmember spending in the upcoming holiday season will boost earnings. Currency fluctuations will continue to add headwinds to revenues in the coming quarters. Robust growth in the billed card business, falling delinquencies and roll rates, steady growth in emerging markets, and introduction of prepaid products like the newly- revamped Serve platform could result in solid gains in the next fiscal year. Restructuring costs in the coming quarters would result in higher- than-expected costs and lower earnings. *The 16x multiple is American Express's historical syr high P/E. *The 13x multiple is American Express's historical syr low P/E. SOURCES: Company Data, SEC filings, Bloomberg Professional Services BIDNESS Etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this webeite are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc.