American Express Co.'s stock shed 1.7% in premarket trade Thursday, after Nomura turned bearish on the payments and travel services company, citing expectations that third-quarter results will disappoint. Analyst Bill Carcache downgraded AmEx to a rare reduce rating from neutral, and cut his stock price target to $56, which is 13% below current levels, from $62. Only 6% of the companies covered by Nomura have reduce ratings. AmEx's third-quarter report will be the first since it ended its exclusive co-branded card relationship with Costco Wholesale Corp. . "We believe the consensus is underestimating the amount of net interest income that [AmEx] will lose with the sale of the Costco portfolio and expect a revenue miss when the company reports 3Q16 results," Carcache wrote in a note to clients. "Layer in what we expect will be a fourth year of market share losses in U.S. billings and growing concerns about business model risk, and we're left with what we view as a recipe for underperformance." The stock had dropped 7.5% year to date through Wednesday, while the Dow Jones Industrial Average has gained 4.9%.
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