JPMorgan Believes American Express Can Ride Out Iran War Better Than Rivals – Says Affluent Customer Base ‘Relatively Shielded’ From Fallout

• JPMorgan upgraded American Express to ‘Overweight’ from ‘Neutral’, while acknowledging that it trades at a modest premium to its peers.
• It argued that the valuation is justified by American Express’s more defensive revenue profile.
• The firm said American Express’s focus on higher-income consumers makes its business better positioned to withstand periods of economic and geopolitical uncertainty.

Wall Street sees American Express Co. (AXP) as one of the better-positioned names in consumer finance, citing its affluent customer base and resilient revenue profile as key advantages, even as geopolitical tensions stemming from the war in Iran continue to weigh on markets.

According to TheFly, analysts at JPMorgan raised their price target on American Express to $400 from $328, implying an upside potential of 14% from Friday’s close.

American Express shares were up nearly 1% in Monday’s pre-market trade.

Why JPMorgan Believes AXP Can Ride Out Iran War Better

JPMorgan upgraded American Express to ‘Overweight’ from ‘Neutral’, while acknowledging that it trades at a modest premium to its peers. However, it argued that the valuation is justified by American Express’s more defensive revenue profile.

The firm said the credit card issuer's focus on higher-income consumers makes its business better positioned to withstand periods of economic and geopolitical uncertainty.

According to JPMorgan, American Express's affluent customer base remains "relatively shielded" from the fallout of the Iran conflict and broader Middle East tensions. With geopolitical risks rising and consumer spending trends remaining uneven, the firm believes the company's customer mix provides a meaningful buffer against potential slowdowns.

The analysts added that American Express offers investors exposure to what they described as the "most insulated cohort in consumer finance," making the stock an attractive choice for investors seeking defensive exposure within the sector.

Analysts at HSBC maintained their ‘Hold’ rating on American Express, while raising the price target to $329 from $312.

American Express is set to report its second-quarter (Q2) earnings on July 24, before the opening bell. Wall Street expects the firm to report earnings per share (EPS) of $4.41 on revenue of $19.7 billion during the quarter.

American Express reported EPS of $4.08 on revenue of $17.86 billion during the year-ago period.

Iran War Heats Up Again

The war between the U.S. and Iran heated up once again after strikes over the past few days. Iran’s Islamic Revolutionary Guards Corps on Monday fired warning shots at two ships attempting to cross the Strait of Hormuz, according to a report by Al Jazeera.

The report added that the U.S. had launched strikes on 17 Iranian targets since July 8, while the IRGC targeted Bahrain, Oman, and Kuwait in retaliatory strikes.

Meanwhile, President Donald Trump said on Monday that the U.S. will take over the Strait of Hormuz.

“We’re going to keep the strait, and we’ll probably run it. We’ll become ⁠the guardian of ⁠the strait. Maybe we’ll call it the guardian ⁠angel of the strait, and we ⁠should be reimbursed for that,” he said during an interview with Fox News.

What Retail Investors Think Of AXP Stock

Retail sentiment on Stocktwits around American Express trended in ‘neutral’ territory at the time of writing.

AXP stock is down 5% year-to-date, but up 8% over the past 12 months. The S&P 500 ETF (SPY) is up 21% over the past 12 months, while the State Street SPDR Dow Jones Industrial Average ETF (DIA) is up 18%.

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