American Express (AXP) Outpaces Stock Market Gains: What You Should Know
American Express (AXP) ended the recent trading session at $303.57, demonstrating a +0.47% swing from the preceding day’s closing price. This move outpaced the S&P 500’s daily gain of 0.38%. Meanwhile, the Dow experienced a drop of 0.25%, and the technology-dominated Nasdaq saw an increase of 1.24%.
The credit card issuer and global payments company’s stock has climbed by 5.32% in the past month, exceeding the Finance sector’s gain of 0.1% and the S&P 500’s gain of 1.17%.
The upcoming earnings release of American Express will be of great interest to investors. The company’s earnings report is expected on January 24, 2025. In that report, analysts expect American Express to post earnings of $3.01 per share. This would mark year-over-year growth of 14.89%. Meanwhile, our latest consensus estimate is calling for revenue of $17.19 billion, up 8.82% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $13.40 per share and a revenue of $65.97 billion, demonstrating changes of +19.54% and +9.01%, respectively, from the preceding 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. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. American Express is currently a Zacks Rank #3 (Hold).
In the context of valuation, American Express is at present trading with a Forward P/E ratio of 22.56. For comparison, its industry has an average Forward P/E of 13.35, which means American Express is trading at a premium to the group.
It is also worth noting that AXP currently has a PEG ratio of 1.73. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The average PEG ratio for the Financial – Miscellaneous Services industry stood at 1.09 at the close of the market yesterday.
