UPDATE 1-FBR ups American Express to market perform

Oct 19 (Reuters) - FBR Capital Markets upgraded American Express Co (AXP.N) to "market perform" from "underperform," saying it will be the first among credit card peers to return to a normalized credit environment, likely as early as next year.

"Recent improvements in credit metrics and favorable (or less unfavorable) outlook for factors likecorporate spending and travel sales that benefit AXP's revenue stream lead us to believe that the downside in the stock may be limited," FBR said.

American Express also benefits from a weaker U.S. dollar, given its larger international exposure, the brokerage noted.

FBR raised its price target on the stock to $37 from $25.

Shares of American Express -- the biggest U.S. credit card issuer by purchase volume -- rose more than 2 percent to $35.74 in afternoon trade on the New York Stock Exchange. (Reporting by Jochelle Mendonca in Bangalore; Editing by Himani Sarkar) (jochelle.mendonca@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: jochelle.mendonca.reuters.com@reuters.net))