The state of consumer spending in the U.S. is tricky to call right now . On the one hand, inflation is hitting some consumers hard. The University of Michigan Consumer Sentiment Index fell to an all-time low in June, although it slightly improved in July, data on Friday showed. The Bureau of Economic Analysis reported Friday that real spending adjusted for inflation increased just 0.1% as consumers barely kept up with inflation.
The bank noted that, earlier this month, large pure-play card issuers such as American Express , Discover , Capital One and Synchrony reported second-quarter earnings that generally showed strong purchase volumes and better-than-forecast credit growth. As such, Bank of America is buy-rated on American Express, giving it a price target of $183 – an upside of around 19% from current prices. That's based on an approximate multiple of 16 times to its 2023 earnings-per-share forecast, it said.