UPDATE: Credit Suisse Reiterates Underperform Rating, Raises PT on American Express Company

In a report published Friday, Credit Suisse Group reiterated its Underperform rating on American Express Company (NYSE: AXP), and slightly raised its price target from $58.00 to $59.00.

Credit Suisse noted, “AXP preannounced 4Q earnings of $637MM or $0.56/share including pretax charges totaling $895MM. Ex-charges, earnings were $1.09/share, largely in line with our estimate. AXP took three charges: (1) $400MM restructuring charge for elimination of 5,400 positions (8.5% of workforce); (2) $153MM in cardmember reimbursements, partially related to 3Q regulatory consent order; and (3) $342MM membership rewards liability adjustment (URR increased to 94% from 93%). The restructuring charge will mainly impact Global Travel as the company moves to online support. Amex also is limiting itself to annual operating cost increases of less than 3% over the next two years (excluding rewards, marketing and cardmember service expenses). Our forecast had been for about 3% growth in opex, and we are reducing it to 2%. However, the ultimate test will be whether Amex will get value from the investments that they have made over the past several years, and those that will be funded with these job reductions.”

American Express Company closed on Thursday at $60.79.