NEW YORK (TheStreet) -- Shares of American Express Co. are lower by 2.02% to $78.17 on heavy volume in mid-afternoon trading on Thursday afternoon, following reports that a judge in Brooklyn, NY ruled the credit card company's regulations for merchants violate antitrust law, the Wall Street Journal reports. The seven week long case was heard over the summer and comes from a 2010 lawsuit in which the Justice Department said that American Express' rules for merchants hinders competition and pushes consumer fees higher. The judge said America Express' rules "constitute an unlawful restraint on trade," the Journal added. Exclusive Report: Jim Cramer's Best Stocks for 2015 One of the main regulations at issue is American Express' policy of keeping businesses that accept AmEx cards from suggesting customers use another card. American Express has defended its merchants policies saying that its business could suffer a material adverse effect if it were to lose the case, the Journal noted. The company pointed out that it uses the fees to fund its rewards programs and other cardholder benefits. Last week membership warehouse retailer Costco announced that it was terminating its partnership with American Express. The company will no longer be the exclusive credit card accepted at Costco stores due to the high transaction fees the company imposes. For more on that topic click here. Separately, TheStreet Ratings team rates AMERICAN EXPRESS CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate AMERICAN EXPRESS CO (AXP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity, increase in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows: AMERICAN EXPRESS CO has improved earnings per share by 14.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERICAN EXPRESS CO increased its bottom line by earning $5.55 versus $4.88 in the prior year. This year, the market expects an improvement in earnings ($5.80 versus $5.55). The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Consumer Finance industry and the overall market, AMERICAN EXPRESS CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500. The net income growth from the same quarter one year ago has exceeded that of the Consumer Finance industry average, but is less than that of the S&P 500. The net income increased by 10.6% when compared to the same quarter one year prior, going from $1,308.00 million to $1,447.00 million. Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.5%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share. You can view the full analysis from the report here: AXP Ratings Report
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