UPDATE: Morgan Stanley Reiterates Equal-Weight Rating, Removes PT on American Express Company as Class Action Settlement Appears Modestly Positive

In a report published Friday, Morgan Stanley analyst Betsy L. Graseck reiterated an Equal-Weight rating on American Express Company AXP, but removed the $90.00 price target. In the report, Morgan Stanley noted, “Our read of Amex's statement is that merchants cannot surcharge differentially on premium cards vs. non-premium cards. Amex says that as a result of this settlement, ‘Merchants continue to agree that if they decide to surcharge their customers using credit or charge cards, any surcharge on American Express Card transactions would be no more than the surcharge on credit or charge card products issued on competing networks.' If a merchant interprets the settlement to mean that they only need to have a similar surcharge on premium V/MA cards (thereby surcharging premium cards at a higher rate than non-premium), it would be more negative for Amex, which primarily offers premium credit card products to affluent customers. However we believe this would require legal interpretation, and would likely result in lost sales as most premium cardholders don't carry non-premium cards.” American Express Company closed on Thursday at $86.41.