Shares of American Express Co. dropped 1.3% in morning trading Monday, after J.P. Morgan analyst Richard Shane downgraded the charge card and travel-related services company, citing concerns over valuation at a time of increased uncertainty over economic growth. Shane cut his rating to neutral from overweight but left his stock price target at $200. While he’s still positive on the company, Shane said he sees “more attractive” risk-versus-reward opportunities among other companies he covers. “We continue to view [AmEx] as one of the most fundamentally compelling names within our coverage,” Shane wrote in a note to clients. “However, we believe current estimates and valuation fully incorporate a relatively positive base case.” AmEx’s stock has rallied 10.9% year to date through Friday, while the Dow Jones Industrial Average has slipped 4.7%. Shane is also concerned over outlook for the economy: “We see increased economic uncertainty, which reduces our confidence in forward estimates and an increased probability of recession.”
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