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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 $167.11 in the latest trading session, marking a -0.57% move from the prior day. This move lagged the S&P 500's daily loss of 0.45%. Meanwhile, the Dow lost 0.04%, and the Nasdaq, a tech-heavy index, added 3.58%.

Prior to today's trading, shares of the credit card issuer and global payments company had gained 6.89% over the past month. This has outpaced the Finance sector's gain of 1.96% and the S&P 500's gain of 5.01% in that time.

American Express will be looking to display strength as it nears its next earnings release, which is expected to be July 21, 2023. On that day, American Express is projected to report earnings of $2.82 per share, which would represent year-over-year growth of 9.73%. Our most recent consensus estimate is calling for quarterly revenue of $15.31 billion, up 14.29% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.15 per share and revenue of $61.03 billion. These totals would mark changes of +13.2% and +15.45%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for American Express. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. American Express is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that American Express has a Forward P/E ratio of 15.07 right now. For comparison, its industry has an average Forward P/E of 9.15, which means American Express is trading at a premium to the group.

Also, we should mention that AXP has a PEG ratio of 1.05. 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. AXP's industry had an average PEG ratio of 1.05 as of yesterday's close.

The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 183, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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