NEW YORK (AP) -- Spending trends by American Express cardholders in the last three months of 2012 relieved Wall Street analysts, who had worried that economic uncertainty could crimp buying.
American Express Co. on Thursday said that spending by cardholders jumped 8 percent in the fourth quarter, even after Superstorm Sandy hurt some spending. At the same time, the company announced 5,400 job cuts, mostly in its travel business.
Janney Capital Markets' Sameer Gokhale on Friday boosted his price target on American Express' shares by $3 to $63 to take into account the quarter's higher-than-expected billings. That's the amount of money the company's cardholders charge to their accounts.
The spending trends are a "modest positive" for American Express' stock, given worries about "choppy" buying patterns by consumers, said Citi analyst Donald Fandetti in a note Friday.
American Express cardholders tend to be more affluent than other credit card users, and the company has done well in the slow, bumpy recovery from the recession.
And the company's cardholders may continue to spend, despite the government's New Year's Day legislation that increased income tax rates on the country's top earners and lifted payroll taxes for most working Americans.
Company officials don't appear too concerned about the possible effects of higher tax rates on its customers' spending, Fandetti said.
For the October-December quarter, American Express expects profit, excluding one-time costs such as severance payments, of $1.09 per share. Analysts polled by FactSet had expected $1.06 per share.
The New York company will report full results next Thursday.
Shares slipped 52 cents, or less than 1 percent, to $60.27 in premarket trading Friday. The stock has gained 24 percent over the past 52 weeks.
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