Fly Intel: What to watch in credit card space earnings reports

American Express (AXP) is scheduled to announced quarterly results on October 23, while Visa (V) and MasterCard (MA) are expected to report on October 28. What to watch for: 1. MOVING TO THE SIDELINES AHEAD OF RESULTS: On Friday, Susquehanna analyst James Friedman downgraded American Express to Neutral from Positive with a $110 price target. The analyst noted that American Express is the product of its merchants and believes the company would be hard pressed to do better than them. When he examined sell-side estimates for key verticals such as Airline, Lodging, Dining, and Retail, the weighted average blend lands at 7.5% growth. With consensus estimates suggesting 11% growth, he believes the company will fall short, leading to his downgrade. 2. ‘MATERIAL’ IMPROVEMENT: Barclays analyst Ramsey El-Assal raised the firm’s price target on Visa to $235 from $225 on Wednesday, while keeping an Overweight rating on the shares. Nearly all reported metrics excluding cross-border volume have showed “material improvement in July and August versus the company’s fiscal third quarter, El-Assal told investors in a research note. 3. KABBAGE ACQUISITION: Back in August, American Express announced that it has entered into an agreement to acquire substantially all of Kabbage. Under the terms of the agreement, American Express will acquire Kabbage’s team and its full suite of financial technology products, data platform and IP built for small businesses. Kabbage’s products include access to flexible lines of credit, online bill payment, cash flow visualization tools, e-gift certificates, and the ability to centralize funds through the company’s recently launched business checking account. The acquisition is expected to close later this year, subject to customary closing conditions. Kabbage’s pre-existing loan portfolio is not included in the purchase agreement. 4. PARTNERSHIPS: Coupa (COUP) and American Express announced that the former’s U.S.-based customers can now use American Express virtual Cards as a payment option with Coupa’s business-to-business payments solution, Coupa Pay. The news builds on the initial availability of American Express virtual Cards in the U.K. and Australia, and simplifies outdated, complex, and inefficient payment processes for businesses around the world. Last month, PayPal (PYPL) and Mastercard announced that they were continuing the global expansion of the PayPal business debit Mastercard. The debit card allows small businesses to have instant access to their PayPal funds and gives them unlimited 0.5% cash back on all their eligible spending. The PayPal business debit Mastercard is now available in five new European countries – Austria, France, Ireland, Italy and Spain – in addition to its existing availability in Germany, the United Kingdom and United States. The debit card has no monthly fees, no foreign exchange fees and a flat ATM withdrawal charge of just EUR2 worldwide. Meanwhile, Visa announced the extension of its global partnership with PayPal, which will expand real-time access to funds for consumers and small businesses that are sending or receiving money via PayPal, Venmo or Xoom. The collaboration expands PayPal’s Instant Transfer service, which leverages Visa Direct for real-time payment capabilities, to global markets and enables fast domestic and cross-border digital payments. The global partnership will also enable PayPal to extend global white label Visa Direct payout services through PayPal and its Braintree, Hyperwallet and iZettle product solutions. This expansion follows the launch of the Instant Transfer service across North America and other markets in Asia Pacific and Europe.