New American Express Price Target With Card Refresh Driving Surge

If we were to solely focus on the Federal Reserve, monetary policy and quarterly results from Oracle (ORCL) on Wednesday night, we would have missed a few positive developments for other constituents in TheStreet Pro Portfolio.

Lifting Our American Express Price Target

Back in mid-November, we lifted our price target for American Express (AXP) shares to $385 from $370 following management comments about the Platinum Card refresh “going very well.”

There were also favorable comments about spending levels, but as you know, our larger focus with AXP shares is tied to the high-margin net card fee revenue stream that reflects cards in force and average fees per card. Given the higher fee tied to the refreshed Platinum card, the outlook for that net card fee revenue, which drives more than 70% of Amex’s pre-tax income, looks bright.

But we have a fresh update on this to share with you, courtesy of comments from Amex CEO Stephen Squeri made on Wednesday.

Squeri shared that the company’s network saw a 9% growth in U.S. retail consumer spending around the key Thanksgiving holiday week, with Platinum retail U.S. consumer spending up 13%. Squeri also shared that Platinum is surpassing company expectations in new card acquisitions for both new small businesses and consumers.

We’ve shared that, as we get more color on the Platinum card refresh, we would revisit our AXP price target. With that in mind, we are nudging that target to $400 from $385 on Thursday.

And we suspect we will not be the only ones to make an adjustment to our price target following Squeri’s comments. That could mean we see AXP shares continue to grind higher, adding to the impressive 28% move since early August. It also makes our decision to load up on AXP shares in March a smart one. If AXP shares continue to grind higher, something that is quite likely, our position size in the shares could lead us to do some position sizing resetting, a move that would also lead to some nice profit taking.

Bank of America on Rate Cuts, AI Expectations

Those comments from Amex’s Squeri were made at the Goldman Sachs Financial Services Conference, an event that also included Bank of America (BAC) and its chairman and CEO Brian Moynihan.

Moynihan shared his view that the Fed’s multiple rate cuts this year should lead to a lower Secured Overnight Financing Rate (SOFR), which is the key U.S. benchmark for overnight borrowing costs between banks. That should lead to better load volumes from middle-market and small business owners, according to Moynihan’s thinking. With that in mind, we’d remind you of our discussion about changes to tax laws and depreciation that should help improve cash flow levels, another potential positive for greater business investment next year.

On the topic of cost savings and AI, Moynihan shared that BofA “just rolled Copilot with the whole 365 Copilot. We'll be through 200,000 people using it by the end of the year, and then roll additional feature functionality.”

Yes, we see that as another favorable set of AI adoption and usage data points. But given BofA’s focus on taking costs out of the business so it continues to grow profitably, that also tells us it will be focusing on productivity with AI. Several times during his presentation, Moynihan alluded to BofA being able to keep its headcount relatively flat as it grew its business over the last few years. That led to his comment that the company’s “commercial bankers will get a 10% efficiency of the tools we gave them this year or next year, which means they can do more logo development with the same number of people they would have otherwise done.”

We see that confirming the growing emphasis on delivering tangible results as enterprise AI adoption and usage rise. It also suggests the structural change in hiring that we saw with the internet is poised to happen again. We continue to think this will be a big topic when companies deliver their first hard look at 2026 guidance when they report the current quarter.

Moynihan’s final comment? BofA expects to buy back more of its stock in the current quarter.

We’ll continue to watch our BAC position size closely, and if we need to make a move like we did earlier this week with Morgan Stanley (MS) shares, we’ll be sure to let you know.

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At the time of publication, TheStreet Pro Portfolio was long AXP, BAC and MS.