AmEx Costco Card Seen as Crown Jewel

American Express Co. (AXP) risks losing at least 15 cents a share of 2015 profit if it fails to maintain a credit-card partnership that Costco Wholesale Corp. (COST) is said to be reconsidering, according to analysts’ estimates.

The lender’s exclusive role as the credit-card provider for Costco’s U.S. stores may generate 20 cents to 30 cents of earnings per share next year, according to William Ryan at Portales Partners LLC. Morgan Stanley’s Betsy Graseck estimates the portfolio could account for 15 cents to 19 cents. AmEx will earn $6.03 a share next year, according to the average of 27 estimates in a Bloomberg survey.

“The Costco relationship is one of the crown jewels of co-brand relationships,” Jason Arnold at RBC Capital Markets said in a phone interview. “It’s something that would be felt.”


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