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AmEx (AXP) Hit 52-Week High: Is Further Upside Left?
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Shares of American Express Company (AXP - Free Report) scaled a 52-week high of $105.25 in Aug 21’s trading session before closing a tad lower at $104.81. This uptrend was supported by the company’s solid second-quarter results.
The stock has rallied nearly 22.9% in a year’s time against its industry’s decline of 5.4%. Now let’s dig deeper to analyze the reasons behind the company’s stock appreciation.
American Express retained investors' favorable sentiment surrounding the stock with an earnings beat in the second quarter wherein it maintained its consistent trend of surpassing estimates from the last four quarters with an average beat of 3.49%.
What Drove the Shares?
During the second quarter, earnings of $1.84 per share beat the Zacks Consensus Estimate by 0.55% year over year. Additionally, the bottom line improved 25% year over year. Results were mainly fueled by higher consumer spending, small business and corporate Card Members. The company’s top line also rose 9% year over year, driven by higher loan volumes and Card Member spending plus fees.
Investors are also impressed by the company’s Global Consumer Services segment, which reported net income of $770 million, up 25% year over year. The segment’s total revenues — net of interest expense of $5.3 billion — also grew 12% year over year on the back of higher loans and Card Member spending as well as fee income.
The company’s other two segments, namely Global Commercial Services and Global Merchant and Network Services, also reported higher net income, growing 18% and 14% respectively, both on a year-over-year basis. However, this upside was partially offset by the soft performance of corporate and others segment.
Driven by the company’s strong second-quarter results, revenue growth estimates were raised. The metric is now expected to rise at least 9% compared with the earlier projection of minimum 8% growth.
Further Upside Left?
The company’s strategic expansion through new card offerings with three important business partners, namely Amazon, Wells Fargo and Marriott and impressive broad-based increases in Card Member spending and fees should drive the stock going forward. It has also passed the Federal Reserve stress test recently, which would allow it to enhance the shareholder value through quarterly dividend and share buybacks.
This Zacks Rank #3 (Hold) company has great growth potential, also apparent from its long-term earnings growth rate of 10.3% and a favorable Value Score of B. The stock has witnessed its 2018 earnings estimates move upward by 0.1% over the past 30 days.
Stocks to Consider
Investors looking for some better-ranked stocks may consider options like On Deck Capital, Inc. , Euronet Worldwide, Inc. (EEFT - Free Report) and Total System Services, Inc. .
On Deck operates as an online platform for small business lending in the United States, Canada and Australia. It sports a Zacks Rank $1 (Strong Buy) and pulled off an average three of the trailing four-quarter positive surprise of 58.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Euronet provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers worldwide. Carrying a Zacks Rank #2 (Buy), the stock delivered an average beat of nearly 0.38% in the last four quarters.
Total System provides payment processing, merchant and related payment services to financial and nonfinancial institutions globally. The company is a Zacks #2 Ranked stock and came up with an impressive earnings surprise of 7.67% over the last four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
AmEx (AXP) Hit 52-Week High: Is Further Upside Left?
Shares of American Express Company (AXP - Free Report) scaled a 52-week high of $105.25 in Aug 21’s trading session before closing a tad lower at $104.81. This uptrend was supported by the company’s solid second-quarter results.
The stock has rallied nearly 22.9% in a year’s time against its industry’s decline of 5.4%. Now let’s dig deeper to analyze the reasons behind the company’s stock appreciation.
American Express retained investors' favorable sentiment surrounding the stock with an earnings beat in the second quarter wherein it maintained its consistent trend of surpassing estimates from the last four quarters with an average beat of 3.49%.
What Drove the Shares?
During the second quarter, earnings of $1.84 per share beat the Zacks Consensus Estimate by 0.55% year over year. Additionally, the bottom line improved 25% year over year. Results were mainly fueled by higher consumer spending, small business and corporate Card Members. The company’s top line also rose 9% year over year, driven by higher loan volumes and Card Member spending plus fees.
Investors are also impressed by the company’s Global Consumer Services segment, which reported net income of $770 million, up 25% year over year. The segment’s total revenues — net of interest expense of $5.3 billion — also grew 12% year over year on the back of higher loans and Card Member spending as well as fee income.
The company’s other two segments, namely Global Commercial Services and Global Merchant and Network Services, also reported higher net income, growing 18% and 14% respectively, both on a year-over-year basis. However, this upside was partially offset by the soft performance of corporate and others segment.
Driven by the company’s strong second-quarter results, revenue growth estimates were raised. The metric is now expected to rise at least 9% compared with the earlier projection of minimum 8% growth.
Further Upside Left?
The company’s strategic expansion through new card offerings with three important business partners, namely Amazon, Wells Fargo and Marriott and impressive broad-based increases in Card Member spending and fees should drive the stock going forward. It has also passed the Federal Reserve stress test recently, which would allow it to enhance the shareholder value through quarterly dividend and share buybacks.
This Zacks Rank #3 (Hold) company has great growth potential, also apparent from its long-term earnings growth rate of 10.3% and a favorable Value Score of B. The stock has witnessed its 2018 earnings estimates move upward by 0.1% over the past 30 days.
Stocks to Consider
Investors looking for some better-ranked stocks may consider options like On Deck Capital, Inc. , Euronet Worldwide, Inc. (EEFT - Free Report) and Total System Services, Inc. .
On Deck operates as an online platform for small business lending in the United States, Canada and Australia. It sports a Zacks Rank $1 (Strong Buy) and pulled off an average three of the trailing four-quarter positive surprise of 58.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Euronet provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers worldwide. Carrying a Zacks Rank #2 (Buy), the stock delivered an average beat of nearly 0.38% in the last four quarters.
Total System provides payment processing, merchant and related payment services to financial and nonfinancial institutions globally. The company is a Zacks #2 Ranked stock and came up with an impressive earnings surprise of 7.67% over the last four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>