Advertisement
New Zealand markets closed
  • NZX 50

    12,325.60
    -3.84 (-0.03%)
     
  • NZD/USD

    0.6011
    -0.0039 (-0.64%)
     
  • NZD/EUR

    0.5519
    -0.0024 (-0.44%)
     
  • ALL ORDS

    8,209.20
    -63.50 (-0.77%)
     
  • ASX 200

    7,971.60
    -64.90 (-0.81%)
     
  • OIL

    80.25
    -2.57 (-3.10%)
     
  • GOLD

    2,402.80
    -53.60 (-2.18%)
     
  • NASDAQ

    19,522.62
    -182.47 (-0.93%)
     
  • FTSE

    8,155.72
    -49.17 (-0.60%)
     
  • Dow Jones

    40,287.53
    -377.49 (-0.93%)
     
  • DAX

    18,171.93
    -182.83 (-1.00%)
     
  • Hang Seng

    17,417.68
    -360.73 (-2.03%)
     
  • NIKKEI 225

    40,063.79
    -62.56 (-0.16%)
     
  • NZD/JPY

    94.6330
    -0.5090 (-0.53%)
     

American Express (AXP) Rises 36% in a Year: More Room to Run?

Shares of American Express Company AXP have gained 36.4% in the past year compared with the industry’s 12.1% growth. The Finance sector and the S&P 500 composite index rallied 21% and 24.8%, respectively, in the same time frame. With a market capitalization of $167.9 billion, the average volume of shares traded in the last three months was 2.9 million.

Enhanced consumer spending, innovative card offerings, a comprehensive digital solutions suite, strategic acquisitions and a robust financial position continue to benefit American Express.

This leading globally integrated payments company with a Zacks Rank #3 (Hold) has a decent earnings surprise history. It beat earnings estimates in three of the trailing four quarters and missed the same once, the average surprise being 6.42%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Can AXP Retain the Momentum?

The Zacks Consensus Estimate for American Express’ 2024 earnings is pegged at $13.01 per share, indicating a 16.1% increase from the year-ago reported figure. The same for revenues is $66.4 billion, implying 9.8% growth from the prior-year number. Management anticipates revenues to witness year-over-year improvement within the range of 9-11% in 2024 while adjusted earnings per share are estimated within $12.65-$13.15.

The Zacks Consensus Estimate for AXP’s 2025 earnings is pegged at $14.95 per share, indicating a 14.9% increase from the 2024 estimate. The same for revenues is $72.3 billion, implying 8.8% growth from the 2024 estimate.

American Express continues to see a boost in revenues, primarily driven by increasing discount revenues that make up a significant portion of its overall top line. Favorable consumer spending is propelling Card Member spending, thus contributing to revenue growth. The growing confidence in travel is expected to further drive service fees and other revenues.

AXP is actively enhancing its presence in the premium consumer market by extending membership benefits tailored to everyday expenses, borrowing needs, travel and lifestyle requirements. The company leverages acquisitions and partnerships to enrich its card offerings and expand its global footprint. For instance, in May 2024, American Express partnered with Emburse to provide comprehensive card reconciliation, virtual card issuance and expense management services through Emburse Spend, specifically designed for American Express Business, Corporate Purchasing and Corporate card customers.

American Express continues to invest in launching new products and upgrading existing ones, which is crucial for maintaining high Card Member retention rates. To stay ahead in the digital age, AXP has enhanced its digital solutions and services. Additionally, to combat the rise in cybercrimes accompanying the digital shift, American Express has implemented effective fraud prevention measures.

AXP's strong liquidity position is evidenced by its cash balance, which is sufficient to cover short-term debt obligations. The company's robust cash-generating capabilities enable it to make significant business investments and prudently deploy capital, including share buybacks and dividends. In March 2024, management approved a 17% increase in the quarterly dividend. Meanwhile, AXP generated net cash of $5.5 million from operations in the first quarter against cash used in operations amounting to $0.4 million in the prior-year period.

American Express boasts an impressive VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.

Stocks to Consider

Some better-ranked stocks in the Finance space are FB Financial Corporation FBK, BrightSphere Investment Group Inc. BSIG and Peakstone Realty Trust PKST. While FB Financial sports a Zacks Rank #1 (Strong Buy), BrightSphere Investment and Peakstone Realty carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ADVERTISEMENT

FB Financial’s earnings surpassed estimates in three of the trailing four quarters and matched the mark once, the average surprise being 11.64%. The Zacks Consensus Estimate for FBK’s 2024 earnings indicates an improvement of 3.3% from the year-ago reported figure. The consensus mark for FBK’s earnings has moved 9.5% north in the past 60 days.

The bottom line of BrightSphere Investment beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 29.34%. The Zacks Consensus Estimate for BSIG’s 2024 earnings indicates an improvement of 24.7%, while the same for revenues implies growth of 11.4% from the corresponding year-ago reported figures. The consensus mark for BSIG’s earnings has moved 9.9% north in the past 60 days.

Peakstone Realty’s earnings outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 8.87%. The Zacks Consensus Estimate for PKST’s 2024 earnings indicates an improvement of 9.7% from the year-ago reported figure. The consensus mark for PKST’s 2024 earnings has moved 6.8% north in the past 60 days.

The FB Financial stock has gained 16.5% in the past year. However, shares of BrightSphere Investment and Peakstone Realty have lost 2.5% and 56.4%, respectively, in the same time frame.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American Express Company (AXP) : Free Stock Analysis Report

FB Financial Corporation (FBK) : Free Stock Analysis Report

BrightSphere Investment Group Inc. (BSIG) : Free Stock Analysis Report

Peakstone Realty Trust (PKST) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research