Analysts at Nomura recently met with Vice Chairman Steve Squeri and Chief Financial Officer Jeff Campbell of American Express Co. (NYSE: AXP). Overall the firm walked away from the meeting feeling greater confidence in the underlying strength of the company’s core franchise.

Nomura discussed several recent developments, which lead the firm to believe negative investor sentiment could be on the verge of shifting at American Express.

Amid the headwinds in its co-brand business, these remain pillars of strength inside of the company. The firm noted that Squeri’s comments were reassuring that American Express’s approximately 50% share of small business billings and T&E partnerships with about 70% of the Fortune 500 are sustainable.

Despite concerns that the company’s discount rate would decline meaningfully in light of heightened competition and loss of the U.S. Department of Justice steering case, Campbell expects pressure to remain modest at two to three basis points annually.

American Express’ ability to maintain premium economics will give it a competitive advantage and positions it to gain share in Europe.

The sale of the company’s $14 billion of Costco loans, which are 100% risk-weighted, would boost the Common Equity Tier 1 ratio to 14.5% from 12.9% currently, positioning the company for yet another strong Comprehensive Capital Analysis and Review (CCAR) performance in 2016 (approval for more than 100% payout).

Unlike Discover and Capital One, which have faced violent market reactions to growth-driven reserve building, American Express is unlikely to face similar headwinds due to its spend-centric model.

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As a result Nomura remains Neutral for now but the firm is preparing to be opportunistic.

Nomura said in its report:

While near-term challenges will result in negative earnings growth over the next couple of quarters and keep us on the sidelines for now, we fully expect American Express to return to 12% to 15% EPS growth by 2017 and think investors who are able to take a longer-term view might want to consider opportunistically becoming more constructive, particularly with several positive catalysts on the horizon in 2016.

Shares of American Express were down 2% at $73.60 Monday afternoon. The stock has a consensus analyst price target of $84.76 and a 52-week trading range of $71.71 to $94.89.

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