American Express (AXP) raised its full-year 2026 revenue growth guidance to 10%, as expected, and maintained its prior earnings per share outlook as it reinvests H1 upside into customer acquisition, technology and other growth initiatives, Morgan Stanley said in a note Monday.
The brokerage sees this as a "constructive" move to sustain long-term top-line momentum, though it does lower its view of near-term operating leverage, according to the note.
American Express said geopolitical developments affected some categories, including travel in the Middle East and gasoline spending, but saw no evidence of a broader slowdown in Q2. However, management did not provide a July or quarter-to-date spending update, the note added.
The planned exits of Lowe's (LOW) and Amazon (AMZN) small-business co-brand portfolios will be a slight headwind to H2 growth, the brokerage said.
Morgan Stanley reduced its 2026 and 2027 EPS estimates by $0.08 and $0.15, respectively, to $17.60 and $20.10.
Morgan Stanley kept an equal weight rating on American Express and lowered its price target to $382 from $385.
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