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Valued at a market cap of $211.4 billion, American Express Company (AXP) is a diversified financial services company, offering charge and credit payment card products, and travel-related services. The New York-based company's range of products and services include charge cards, credit cards and other payment and financing products, merchant acquisition and processing, and servicing and settlement services among others.
Companies valued at $200 billion or more are typically classified as “mega-cap stocks,” and AXP fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the credit services industry. AXP's strong brand recognition and global presence give it a competitive advantage. With a history dating back to 1850, the company has established trust and loyalty with customers worldwide. Its diversified revenue streams, including credit card services and travel services, contribute to its financial stability and growth potential. Additionally, its extensive network in over 130 countries helps mitigate risks associated with regional economic fluctuations.
This card payment giant has slipped 7.8% from its 52-week high of $326.28, achieved on Jan. 23. Moreover, it has declined 1.1% over the past three months, slightly falling behind the broader S&P 500 Index’s ($SPX) marginal drop over the same time frame.
Nonetheless, in the longer term, AXP has soared 38% over the past 52 weeks, outpacing SPX’s 17.5% return. Moreover, on a YTD basis, shares of AXP are up 1.8%, compared to SPX’s 1.2% gain over the same time frame.
To confirm its recent bearish trend, AXP has been trading below its 50-day moving average since mid-February. However, it has remained above its 200-day moving average since the past year.
On Jan. 24, AXP’s shares fell 1.4% after its Q4 earnings release. Although the company delivered better-than-expected Q4 EPS of $3.04 and revenue of $17.2 billion which met Wall Street’s estimates, its underwhelming guidance for fiscal 2025 disappointed the investors. Management projected full-year earnings between $15 and $15.50 per share, falling short of analysts’ expectations.
On a positive note, record-high card member spending and fee growth drove an 8.7% year-over-year revenue increase and a 16% rise in earnings. However, higher customer engagement and marketing expenses, along with a significant decline in income from the International Card Services segment, partially offset these gains and may have further dampened investor sentiment.
AXP has underperformed its rival, Capital One Financial Corporation (COF), which gained 45.7% over the past 52 weeks and 12.7% on a YTD basis.
Despite AXP’s recent slight underperformance relative to the S&P 500, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 29 analysts covering it, and the mean price target of $322.69 suggests a modest 7.2% premium to its current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
