American Express (AXP) — On Oct. 17, this investment-grade global credit card and travel-related services stock broke from a five-month consolidation on heavy volume. I recommended the stock the next day with a 12-month target of $96 and a trading target of $86.
On Friday, AXP announced an agreement with U.S. Bank to accept their credit cards on the American Express card network. Analysts are of the opinion that this new arrangement will enhance the experience of AmEx cardholders since U.S. Bank is renowned for its rewards and discounts. Wells Fargo (WFC) partnered with American Express in August.
Analysts’ consensus estimates are earnings per share of $4.92 this year, up from $4.40 in 2012, and $5.41 in 2014.
AXP’s high-volume breakaway gap from a quadruple top has been confirmed by a powerful rally. On Thursday, a new MACD buy was triggered following a break to a new high.
With the new agreements in place and positive technical signals, the trading target is raised to $92. I will continue to monitor AXP for further changes in earnings estimates.