The 2016 Bullish and Bearish Case for American Express and Visa

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The major credit cards of the Dow had a somewhat mixed year with each at opposing ends of the spectrum. Visa Inc. (NYSE: V) was the obvious winner as a card processor, while American Express Co. (NYSE: AXP) went south as a credit card issuer. There were a fair amount of unique factors that precipitated these polar performances, despite both companies residing in the same industry.

Now that 2015 has ended, 24/7 Wall St. wanted to see what the strategists and analysts on Wall Street expect for the stock market and key stocks in 2016.

It turns out the bull market was interrupted in 2015 as the Dow Jones Industrial Average closed out the year at 17,425.03 for a change of -2.2% for the year. That may be hardly a reason to call a bear market ahead, but it is after six straight years of gains.

American Express

While the index performance of the Dow does not account for individual stock dividends, American Express closed out 2015 at $69.55, for a loss of 24.2%, including its dividend adjustments.

For the year ahead, the consensus analyst price target from Thomson Reuters is $80.92. If the analysts are correct, the expected total return for American Express would be 18%, if you include its dividend yield of 1.67%.


Something to take into account now is that 2016 has gotten off to a very bumpy start. American Express shares were trading at $64.42 after a few days of trading.

American Express took a huge shot this past year when its Costco partnership was ended. Prior to this, Amex was the exclusive card of Costco, but after these companies went separate ways, American Express realized that it had lost a very valuable partner.