American Express's Stock Slips After Oppenheimer Downgrade

American Express Co.'s stock slipped 0.7% in premarket trade Tuesday, after the charge card and travel services company was downgraded at Oppenheimer, which cited concerns that intensifying competition will hurt future profitability. Analyst Ben Chittenden lowered his rating to underperform from perform, and set a stock price target at $68, which is 15% below Monday's closing price of $79.63. Chittenden said that while the stock's valuation is the cheapest it has been in a long time, there's more to the stock's weakness than recent headwinds such as loss of exclusivity agreements and the negative effects of currency movements. "While it may feel like recent bad news is a lot of one offs, we think that it is more a symptom and that profitability of the underlying business is under pressure," Chittenden wrote in a note to clients. "Intensified competition likely continues to drive up [customer] acquisition costs/reduce profitability." The stock, a component of the Dow Jones Industrial Average, has lost 14% year to date, while the Dow has gained 0.3%.