AMERICAN EXPRESS &lt;AXP> SEEN IN POSSIBLE SPINNOFF

  American Express Co remained silent on
  market rumors it would spinoff all or part of its Shearson
  Lehman Brothers Inc, but some analysts said the company may be
  considering such a move because it is unhappy with the market
  value of its stock.
      American Express stock got a lift from the rumor, as the
  market calculated a partially public Shearson may command a
  good market value, thereby boosting the total value of American
  Express. The rumor also was accompanied by talk the financial
  services firm would split its stock and boost its dividend.
      American Express closed on the New York Stock Exchange at
  72-5/8, up 4-1/8 on heavy volume.
      American Express would not comment on the rumors or its
  stock activity.
      Analysts said comments by the company at an analysts'
  meeting Tuesday helped fuel the rumors as did an announcement
  yesterday of management changes.
      At the meeting, company officials said American Express
  stock is undervalued and does not fully reflect the performance
  of Shearson, according to analysts.
      Yesterday, Shearson said it was elevating its chief
  operating officer, Jeffery Lane, to the added position of
  president, which had been vacant. It also created four new
  positions for chairmen of its operating divisions.
      Analysts speculated a partial spinoff would make most
  sense, contrary to one variation on market rumors of a total
  spinoff.
      Some analysts, however, disagreed that any spinoff of
  Shearson would be good since it is a strong profit center for
  American Express, contributing about 20 pct of earnings last
  year.
      "I think it is highly unlikely that American Express is
  going to sell shearson," said Perrin Long of Lipper Analytical.
  He questioned what would be a better investment than "a very
  profitable securities firm."
      Several analysts said American Express is not in need of
  cash, which might be the only reason to sell a part of a strong
  asset.
      But others believe the company could very well of
  considered the option of spinning out part of Shearson, and one
  rumor suggests selling about 20 pct of it in the market.
      Larry Eckenfelder of Prudential-Bache Securities said he
  believes American Express could have considered a partial
  spinoff in the past.
      "Shearson being as profitable as it is would have fetched a
  big premium in the market place. Shearson's book value is in
  the 1.4 mln dlr range. Shearson in the market place would
  probably be worth three to 3.5 bilion dlrs in terms of market
  capitalization," said Eckenfelder.
      Some analysts said American Express could use capital since
  it plans to expand globally.
      "They have enormous internal growth plans that takes
  capital. You want your stock to reflect realistic valuations to
  enhance your ability to make all kinds of endeavors down the
  road," said E.F. Hutton Group analyst Michael Lewis.
      "They've outlined the fact that they're investing heavily
  in the future, which goes heavily into the international
  arena," said Lewis. "...That does not preclude acquisitions and
  divestitures along the way," he said.
      Lewis said if American Express reduced its exposure to the
  brokerage business by selling part of shearson, its stock might
  better reflect other assets, such as the travel related
  services business.
      "It could find its true water mark with a lesser exposure
  to brokerage. The value of the other components could command a
  higher multiple because they constitute a higher percentage of
  the total operating earnings of the company," he said.
       Lewis said Shearson contributed 316 mln in after-tax
  operating earnings, up from about 200 mln dlrs in 1985.
  

