It’s bye-buy for American Express

This advisory is dropping American Express Co. (AXP-NYSE, $75.64) from its “buy” list. Yes, its shares are yelling “charge it!” (they’re up 29 per cent this year) and running ahead of the S&P 500 Index’s gain of 19 per cent. But those same shares are now trading at 17 times trailing earnings, within eight per cent of their five-year average.

Still, this advisory thinks you should give Amex credit for potentially “delivering double-digit profit growth” in the second half of 2013. It also thinks Amex deserves praise for its attractive long-term outlook.

Not surprisingly, for Dow Theory Forecasts, Amex remains a “long-term buy,” although it’ll be losing one of its neighbours: Abbott Laboratories (ABT-NYSE, $34.97). That’s because Abbott chalked up “sluggish” growth numbers for the June quarter.

Admittedly, in emerging markets, the global health-care company appears to be in peak condition. Sales there – particularly, in Russia and China – jumped 13 per cent to US$2.3 billion. But its momentum is being dragged down by its U.S. operations. So, Abbott is now rated “B (average).”

Dow Theory Forecasts
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(800)-233-5922, US$289 a year.

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