Deutsche Bank estimates that a Costco USA portfolio sale to Citi (C) could result in a $2.2B pre-tax gain for American Express (AXP). Deutsche tells investors this morning that as best it knows, Costco’s (COST) new agreement with Citi requires the bank to purchase the Costco USA portfolio. The American Express deal with Costco ends ten months from now. Deutsche thinks Citi will be under pressure from Costco to negotiate the purchase well ahead of the deadline, which the firm estimates will occur in Q3. Deutsche believes the sale gain could fund "meaningful" earnings growth for AmEx, with a large part of the gain likely funding upfront credit card promotions. The firm keeps a Buy rating on American Express with a $90 price target.

BMO Capital raised the firm's price target on American Express to $175 from $167 and keeps an Underperform rating on the shares. The firm cites the company's broad-based Q1 earnings beat, with higher than previously-modeled net interest income and slightly lower credit costs being partly offset by higher expected operating expenses. BMO adds however that it remains concerned that American Express's elevated loan restructuring rate could eventually bleed into higher credit provisions.

RBC Capital raised the firm's price target on American Express to $253 from $250 and keeps an Outperform rating on the shares. The company's Q1 results showed a "good quarter" with revenues that met expectations, controlled core expenses, and acceptable credit trends, the analyst tells investors in a research note. While spend volumes continued to moderate, American Express management remains confident on the near and longer term revenue trajectory, the firm added.

Morgan Stanley raised the firm's price target on American Express to $226 from $222 and keeps an Equal Weight rating on the shares following Q1 results that were better than expected, led by net interest income, credit, and expenses. The firm is taking forward EPS up 1%, noting that its 2024 estimate is now above the midpoint of management's EPS guidance at $13.02, though it maintains an Equal Weight rating, citing valuation.