American Express (AXP) Exceeds Market Returns: Some Facts to Consider

Zacks
02 Apr

American Express (AXP) closed the most recent trading day at $270.48, moving +0.53% from the previous trading session. The stock's performance was ahead of the S&P 500's daily gain of 0.38%. On the other hand, the Dow registered a loss of 0.03%, and the technology-centric Nasdaq increased by 0.87%.

The the stock of credit card issuer and global payments company has fallen by 8.95% in the past month, lagging the Finance sector's loss of 3.41% and the S&P 500's loss of 5.59%.

The investment community will be closely monitoring the performance of American Express in its forthcoming earnings report. The company is scheduled to release its earnings on April 17, 2025. On that day, American Express is projected to report earnings of $3.47 per share, which would represent year-over-year growth of 4.2%. Alongside, our most recent consensus estimate is anticipating revenue of $17.02 billion, indicating a 7.69% upward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15.30 per share and a revenue of $71.59 billion, indicating changes of +14.61% and +8.55%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for American Express. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% lower. American Express is currently a Zacks Rank #3 (Hold).

Looking at its valuation, American Express is holding a Forward P/E ratio of 17.58. This represents a premium compared to its industry's average Forward P/E of 9.3.

We can also see that AXP currently has a PEG ratio of 1.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Financial - Miscellaneous Services industry held an average PEG ratio of 0.99.

The Financial - Miscellaneous Services industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 34, positioning it in the top 14% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AXP in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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