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New York-based American Express Company (AXP) operates as an integrated payments company operating through U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services segments. With a market cap of $213.5 billion, American Express’s operations span the Americas, Indo-Pacific, Europe, Africa, and internationally.
The credit card giant is set to release its fourth-quarter earnings before the market opens on Friday, Jan. 24. Ahead of the event, analysts expect Amex to report a non-GAAP profit of $3.02 per share, up 15.3% from $2.62 per share reported in the year-ago quarter. The company has a mixed earnings surprise history. It surpassed analysts’ earnings estimates thrice over the past four quarters while missing on one other occasion. Its adjusted EPS for the last reported quarter grew 5.8% year-over-year to $3.49 while exceeding Wall Street’s expectations by 6.7%.
For fiscal 2024, analysts expect Amex to report an adjusted EPS of $13.41, representing a 19.6% surge from $11.21 in fiscal 2023. While in fiscal 2025, its earnings are expected to grow 13.2% year-over-year to $15.18.
American Express’ stock prices soared nearly 62.7% in the past year, significantly outpacing the S&P 500 Index’s ($SPX) 26.3% returns and the Financial Select Sector SPDR Fund’s (XLF) 29.8% surge during the same time frame.
Amex experienced a 3.2% dip in stock prices following the release of its Q3 earnings on Oct. 18. The company reported an 8.2% year-over-year growth in total revenues net of interest expenses, reaching $16.6 billion which fell slightly below analysts’ expectations. Nevertheless, Amex has demonstrated resilience by achieving 10 consecutive quarters of record revenue. This growth underscores the strength of its business model and continuous investments in expansion.
Amex has observed a 6% increase in total card member spending and an 18% rise in card fee revenue. The company successfully attracted 3.3 million new premium card members, while maintaining high retention rates, excellent credit performance, and stringent expense management.
Additionally, Amex has reported notable growth in profits. In light of the robust performance during the quarter, the company has revised its full-year adjusted EPS guidance upward to $13.75 - $14.05, from the previously announced range of $13.30 - $13.80.
The consensus opinion on AXP stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 28 analysts covering the stocks, eight recommend “Strong Buy,” two suggest “Moderate Buy,” 15 advise “Hold,” and three advocate a “Strong Sell” rating. As of writing Amex is trading above its mean price target of $287.60.
