American Express (AXP) closed the recent trading session at $266.21, representing a modest decline of 0.41% from the previous day’s closing price. This performance lagged behind the S&P 500’s 0.25% gain for the day, although the Dow Jones Industrial Average registered a 0.2% gain, and the tech-heavy Nasdaq saw a 0.56% increase. Despite the slight dip, AXP shares have shown strength over the past month, gaining 5.29%, outpacing the Finance sector’s 1.86% gain and the broader S&P 500’s 1.65% gain during that period.
The investment community is eagerly awaiting American Express’s upcoming earnings release scheduled for October 18, 2024. Analysts project an EPS of $3.26, marking a 1.21% drop compared to the same quarter last year. Simultaneously, the latest consensus estimate forecasts revenue of $16.66 billion, representing an 8.28% rise from the equivalent quarter in the previous year. Looking ahead to the full year, the Zacks Consensus Estimates predict earnings of $13.13 per share and revenue of $65.99 billion, signifying year-over-year increases of +17.13% and +9.04%, respectively.
Investors should pay close attention to any recent revisions in analyst estimates for American Express. These revisions often reflect the latest near-term business trends, and positive revisions indicate analysts’ confidence in the company’s performance and profit potential. Our research suggests a strong correlation between these estimate revisions and near-term stock movements. To capitalize on this phenomenon, we developed the Zacks Rank, a proven rating model that incorporates these estimate changes. The Zacks Rank, ranging from #1 (Strong Buy) to #5 (Strong Sell), has a demonstrated track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate for AXP has moved 0.04% higher, placing the company in a Zacks Rank #2 (Buy).
From a valuation standpoint, American Express currently holds a Forward P/E ratio of 20.36. This is significantly higher than its industry’s average Forward P/E of 11.23, suggesting that AXP is trading at a premium compared to its peers. Investors should also consider AXP’s PEG ratio, which stands at 1.48. The PEG ratio, similar to the widely-used P/E ratio, takes into account the company’s expected earnings growth rate. AXP’s industry had an average PEG ratio of 1.1 as of yesterday’s close. The Financial – Miscellaneous Services industry, part of the Finance sector, currently holds a Zacks Industry Rank of 54, placing it in the top 22% of all 250+ industries. The Zacks Industry Rank is ordered from best to worst based on the average Zacks Rank of individual companies within each sector. Our research indicates that the top 50% ranked industries outperform the bottom half by a factor of 2 to 1.
