December 5, 2008 / 4:23 PM / 10 years ago

UPDATE 1-Credit Suisse cuts American Express price target

Dec 5 (Reuters) - Credit Suisse cut its price target on the shares of American Express Co (AXP.N), citing significant near-term risk and additional downside to earnings from further deterioration in credit losses as well as lower spending levels over the next several months. American Express’ recent efforts to close inactive accounts and reduce a small portion of available credit lines to riskier cardholders should modestly hurt spending and loss rates in the near term, but will reduce risk over the longer term, the brokerage said.

Credit Suisse cut its price target on the stock to $25 from $32 and maintained an “underperform” rating.

However, the brokerage said American Express’ conversion to a bank holding company improves its ability to fund itself efficiently over the course of the next year.

Separately, Fox-Pitt Kelton cut its 2009 profit view on American Express to $2.80 a share from $3.21 to account for a steeper downturn assumption.

Shares of the company were down 29 cents to $20.55 Friday morning on the New York Stock Exchange. (Reporting by Amiteshwar Singh in Bangalore; Editing by Himani Sarkar)

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