American Express (NYSE:AXP) Weighed Down by Durbin, Regulatory Atmosphere

American Express (NYSE:AXP) has been getting more bearish treatment recently, as Durbin and other regulations threaten their earnings.

Canaccord says, "American Express reported consumer spending increased by 15% in Q4/10, pushing the credit card company’s revenue 13% higher over the previous year; however, shares dropped on an EPS miss and regulatory concerns. Recurring EPS came in at $0.88, short of the consensus $0.96, but ahead of Q4/09’s $0.60 per share. The company reported improvements in bad loans, with provisions for losses decreasing by 68% from the prior year, and delinquencies, seeing 2.1% of accounts being more than one month behind as opposed to 3.7% last year. Write-offs decreased to 4.4% from Q4 from 5.2% in Q3 and 7.5% in Q4/09. Concerns surrounding the 'Durbin amendment' also weighed heavy on investors’ minds. The amendment proposes that fees charged to retailers for debit transactions are reduced; and while American Express does not offer debit cards, there are concerns that merchants may direct customers to use their debit cards as opposed to their credit cards. Credit Suisse held their bearish stance on the company, reiterating that it believes American Express will experience pressure on its discount rate in the more adverse regulatory environment. The brokerage notes that the credit card company has the highest discount rate among the four major card networks, something which is likely to garner additional attention in the next 12-18 months as the 'Durbin amendment” comes into play.'

American Express closed Wednesday at $44.46, losing $0.34, or 0.76 percent.

Total System Services (NYSE:TSS) Releases Strong 2011 Guidance

Total System Services (NYSE:TSS) beat expectations in the fourth quarter, and with low exposure to Durbin and building out of international operations, had their EPS and PT raised by Susquehanna.

The company said, "TSS plans to continue to build out its international operations and its merchant acquiring business. The Durbin amendment should not have a negative impact as TSS is not a big debit card processor."

Susquehanna raised their full year 2011 EPS estimate from $1.03 to $1.09 released their FY12 estimate at $1.18.

They maintain their "Neutral" rating on Total System Services (TSS), which was trading at $18.00m, gaining $0.47, or 2.68 percent, as of 2:05 PM EST. Susquehanna boosted their price target on TSS from $15 to $17.50.