Ahead of the Bell: American Express upgraded

NEW YORK - An analyst on Monday raised his rating on American Express Co., saying the credit card lender would be among the least affected by new legislation and that loan-loss concerns are waning.

Stifel Nicolaus & Co. analyst Chris Brendler increased his rating on the New York-based lender's stock to "Hold" from "Sell."

In a research note, Brendler said American Express' business model makes it the least likely to face negative effects from the government's recently passed legislation overhauling credit card lending. Brendler noted American Express' spend-centric model and small exposure to subprime borrowers as reasons it will see less of an impact from the new laws.

Brendler also said the lender is likely to see losses stabilize in the second half of 2009 as management has previously predicted.

Brendler, did however, note that credit losses are still rising. Nearly all lenders have faced mounting losses as more customers fall behind on repaying loans amid the recession and rising unemployment.

Despite the upgrade, Brendler maintained his earnings estimates for the stock. Brendler forecasts American Express will earn 65 cents per share in 2009 and 75 cents per share in 2010.

Analysts polled by Thomson Reuters, on average, forecast earnings of 97 cents per share for 2009 and $1.44 per share for 2010.

Shares of American Express slipped 12 cents to $22.15 in premarket trading.

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