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American Express (AXP) Announces Sale of Accertify to Accel-KKR
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American Express Company (AXP - Free Report) recently announced that it is divesting its wholly-owned subsidiary Accertify to Accel-KKR. Accertify provides services like fraud prevention, account protection, payment gateway solutions and chargeback management. This deal will enable Accertify to become an independent entity, post the divestiture and help American Express streamline its operations. The terms of the transaction have not been disclosed yet.
Per a report by Fortune Business Insights, the fraud detection and prevention market is expected to grow to $182.7 billion in 2030 compared with $44 billion in 2023. This highlights the growing demand for fraud prevention services, and Accertify’s attractive offerings in this space poise the company well for growth. With the help of Accel-KKR, Accertify will be able to enhance its offerings and flourish in the future.
This move bodes well for American Express as the divestiture of a subsidiary like Accertify will help simply its operations. American Express will be able to allocate its resources to other strategic projects with better returns, positioning it well for growth. Although the terms were not disclosed, this sale is likely to free up capital for AXP, which can be used to perform shareholder-friendly moves or expand its operations.
Increasing frauds have forced businesses to resort to fraud prevention measures, which would otherwise have cost them billions of dollars. Accertify is expected to leverage the opportunity and provide innovative solutions for businesses. Moves like these should help AXP achieve its long-term earnings per share (EPS) growth target in the mid-teens.AXP expects total revenues to grow at around 15% year over year in 2023. Looking ahead, the company anticipates a continuous revenue growth trajectory, targeting more than 10% in the long run.
Price Performance
Shares of American Express have gained 19.4% in the past three months compared with the industry’s growth of 17.8%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
American Express currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the finance sector are Cboe Global Markets (CBOE - Free Report) , Coinbase Global (COIN - Free Report) and Assurant, Inc. (AIZ - Free Report) .
Cboe Global delivered a trailing four-quarter average earnings surprise of 4.1%. The Zacks Consensus Estimate for CBOE’s 2024 earnings suggests a year-over-year rise of 6.4%. It presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Coinbase has a decent track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 63%. The Zacks Consensus Estimate for COIN’s 2024 EPS indicates a year-over-year increase of 35.1%. It currently carries a Zacks Rank #2.
Estimates for Assurant’s 2024 EPS indicate a year-over-year increase of 4.3%. The expected long-term earnings growth rate is 14.6%, better than the industry average of 11.8%. It presently sports a Zacks Rank #1.
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American Express (AXP) Announces Sale of Accertify to Accel-KKR
American Express Company (AXP - Free Report) recently announced that it is divesting its wholly-owned subsidiary Accertify to Accel-KKR. Accertify provides services like fraud prevention, account protection, payment gateway solutions and chargeback management. This deal will enable Accertify to become an independent entity, post the divestiture and help American Express streamline its operations. The terms of the transaction have not been disclosed yet.
Per a report by Fortune Business Insights, the fraud detection and prevention market is expected to grow to $182.7 billion in 2030 compared with $44 billion in 2023. This highlights the growing demand for fraud prevention services, and Accertify’s attractive offerings in this space poise the company well for growth. With the help of Accel-KKR, Accertify will be able to enhance its offerings and flourish in the future.
This move bodes well for American Express as the divestiture of a subsidiary like Accertify will help simply its operations. American Express will be able to allocate its resources to other strategic projects with better returns, positioning it well for growth. Although the terms were not disclosed, this sale is likely to free up capital for AXP, which can be used to perform shareholder-friendly moves or expand its operations.
Increasing frauds have forced businesses to resort to fraud prevention measures, which would otherwise have cost them billions of dollars. Accertify is expected to leverage the opportunity and provide innovative solutions for businesses. Moves like these should help AXP achieve its long-term earnings per share (EPS) growth target in the mid-teens.AXP expects total revenues to grow at around 15% year over year in 2023. Looking ahead, the company anticipates a continuous revenue growth trajectory, targeting more than 10% in the long run.
Price Performance
Shares of American Express have gained 19.4% in the past three months compared with the industry’s growth of 17.8%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
American Express currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the finance sector are Cboe Global Markets (CBOE - Free Report) , Coinbase Global (COIN - Free Report) and Assurant, Inc. (AIZ - Free Report) .
Cboe Global delivered a trailing four-quarter average earnings surprise of 4.1%. The Zacks Consensus Estimate for CBOE’s 2024 earnings suggests a year-over-year rise of 6.4%. It presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Coinbase has a decent track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 63%. The Zacks Consensus Estimate for COIN’s 2024 EPS indicates a year-over-year increase of 35.1%. It currently carries a Zacks Rank #2.
Estimates for Assurant’s 2024 EPS indicate a year-over-year increase of 4.3%. The expected long-term earnings growth rate is 14.6%, better than the industry average of 11.8%. It presently sports a Zacks Rank #1.