Affirm raised to Buy, American Express cut to Sell at BTIG

Affirm Holdings (NASDAQ:AFRM) stock climbed 5.0% in Tuesday premarket trading after BTIG upgraded the Buy Now, Pay Later financing company to Buy from Neutral, as the company’s metrics compare favorably with credit card giant American Express (NYSE:AXP), which BTIG downgraded to Sell.

American Express (AXP) stock dipped 1.3%.

“While the technology is different, the financial models of the two are very similar,” analyst Vincent Caintic wrote in a note to clients.

Affirm (AFRM) is “trying to build another network that is as good and as customer-friendly as Amex, minus the technical debt and minus the velvet rope,” Founder and CEO Max Levchin said at a recent tech conference. BTIG agrees with the company’s view that AFRM is Amex for “the other 99%.”

Caintic’s Buy rating aligns with the SA Quant rating of Strong Buy and the average SA Analyst rating of Buy, but differs from the average Wall Street rating of Hold.

At the same time, the analyst downgraded American Express (AXP) to Sell from Neutral, on the view that its fundamentals “are more likely to get worse than better,” even as the market’s expectations for improvement continue to increase.

Caintic expects American Express (AXP) and other prime credit card companies to “to follow Ally Financial’s (ALLY, Neutral) lead and declare consumer conditions worse than they had anticipated for 2H24. At the same time, we expect Amex to also thread in the dichotomy of their consumer being ‘resilient’.”

Note that earlier, HSBC downgraded AmEx (AXP) to Hold, on the basis that the stock’s recent runup makes further upside potential limited.

Caintic’s Sell rating clashes with the SA Quant rating of Strong Buy and the average SA Analyst rating of Buy. It’s also more bearish than the average Wall Street rating of Hold.