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American Express (AXP) Dips More Than Broader Markets: What You Should Know

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American Express (AXP - Free Report) closed at $147.12 in the latest trading session, marking a -0.43% move from the prior day. This change lagged the S&P 500's 0.4% loss on the day. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq lost 4.72%.

Heading into today, shares of the credit card issuer and global payments company had lost 5.34% over the past month, lagging the Finance sector's loss of 3.82% and outpacing the S&P 500's loss of 5.57% in that time.

American Express will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.19, up 0.46% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $14.26 billion, up 17.39% from the prior-year quarter.

Any recent changes to analyst estimates for American Express should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.35% lower. American Express currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, American Express is holding a Forward P/E ratio of 14.83. For comparison, its industry has an average Forward P/E of 10.35, 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 1.25. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial - Miscellaneous Services was holding an average PEG ratio of 0.71 at yesterday's closing price.

The Financial - Miscellaneous Services industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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