Amercian Express may look expensive, but it still has room to run due to the resumption of the Iran war, according to JPMorgan. The investment bank upgraded American Express to overweight from neutral. It has a $400 price target on shares, suggesting 14% upside from Monday’s close. “While AXP trades at a slight premium to the group, we believe that premium is warranted given the defensive nature of its revenues,” analyst Richard Shane said Monday in a note to clients. “In an environment defined by renewed geopolitical risk and an uneven consumer, AXP offers investors exposure to the most insulated cohort in consumer finance.” American Express is expected to trade at 17.4 times price to earnings by the end of 2027, according to a consensus estimate compiled by JPMorgan. That’s more than double the estimated price-to-earnings ratio for Capital One Financial . Shares of American Express have jumped 8% over the past three months as its credit card business remained robust in spite of geopolitical uncertainties, largely due to its focus on affluent customers. That gives it an edge against several of its competitors, especially after President Donald Trump last week called off the U.S.’ ceasefire with Iran , JPMorgan said. AXP 3M mountain Shares are up 8% over the past three months. “The ‘pause, not peace’ dynamic we contemplated in 1Q has re-emerged … reintroducing the risk of an energy price spike that would squeeze lower- and middle-income consumers most acutely,” Shane wrote. “AXP’s affluent, high-income customer base is relatively shielded from the Middle East crisis and the associated energy squeeze.” International benchmark Brent crude futures with September delivery were last trading at $78.64 per barrel, up more than 9% over the past five days. Shops on the Street are split on American Express. Of the 32 analysts covering the bank, 15 have a buy or strong buy on shares, while 16 have a hold rating on the stock, LSEG data shows.
American Express is a buy despite its expensive valuation, JPMorgan says
