American Express on Friday narrowly beat earnings expectations for the holiday quarter, raised the dividend and provided 2025 guidance. American Express stock, a Dow Jones component, fell back into buy range.
Late Thursday, student loan provider SLM missed earnings views and forecast a slowdown in student loan originations. SLM stock reversed lower on Friday.
American Express targets affluent cardholders. In recent years, Amex cards have become a status symbol among millennial and Gen Z cardholders. Warren Buffett-led Berkshire Hathaway is a major owner of AXP stock, owning 21.5% of total outstanding shares.
Sallie Mae, which formally operates under the updated name SLM, offers private student loans, credit cards, personal loans and savings accounts to its customers, many of whom are young college students. Originally set up as a government sponsored entity (GSE) named the Student Loan Market Association in 1972, Congress terminated its federal charter in 2004.
American Express Earnings, AXP Stock
For Q4, American Express reported earnings of $3.04 per share, a 16% increase vs. a year earlier, and just above views for $3.03. Revenue came in at $17.18 billion, narrowly above the $17.16 billion target.
On Friday, the credit card giant said it would hike its quarterly dividend by 17%, to 82 cents per share, beginning in the first quarter.
In the key holiday quarter, American Express "saw record levels of annual card member spending, record net card fee revenues, and a record 13 million new card acquisitions," CEO Stephen Squeri said in an earnings release.
For 2025, the company projected revenue growth of 8%-10% and earnings per share of $15-$15.50. Analysts are forecasting revenue growth of 8.9% and EPS of $15.26, FactSet shows.
American Express stock shed 1.5% in Friday's stock market action, back in range from a 307.82 flat-base buy point. Shares pecked out a record high on Thursday ahead of the earnings report. They remain above all the shorter- and longer-term moving averages.
The Dow Jones financial company had cleared the flat-base entry on Jan. 15 amid strong bank earnings. American Express also agreed to settle a federal wire fraud investigation.
The relative strength line for AXP stock remains near highs, a sign of outperformance vs. the S&P 500.
Sallie Mae Earnings, SLM Stock
For the fourth quarter of 2024, Sallie Mae reported earnings of 50 cents per share and revenue of $390 million, including net interest income of $362 billion.
That fell broadly short of FactSet analyst views for EPS of 55 cents and revenue of $397.4 million, including net interest income of $374 million.
Year over year, Sallie Mae earnings slid 31% and revenue fell 12%. That marked the third consecutive quarter of falling sales.
Private student loan originations grew 17% in Q4 and 10% in full-year 2024, the company said.
For 2025, SLM said it sees private education loan originations growing 6%-8%. It forecast 2025 EPS of $3-$3.10, with the midpoint of $3.05 a penny above analyst estimates.
Analysts see top-line growth rebounding in the latter half of the year.
Shares of SLM closed down 1% at 29.01 on Friday. The student loan provider initially rallied for a fourth straight day, making a new high intraday.
Ahead of Thursday's report, SLM stock rebounded from support at its rising 10-week moving average. That put it in an actionable buy range through 29.87.
The stock's relative strength line is moving to new highs, a favorable sign.
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