We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is American Express (AXP) Up 8.3% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for American Express (AXP - Free Report) . Shares have added about 8.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is American Express due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
American Express Q1 Earnings Beat Estimates
American Express Co. delivered first-quarter 2020 earnings of $1.98 per share, beating the Zacks Consensus Estimate by 17.2%. However, the bottom line was down 1.5% year over year.
The quarter reflected softness in spending volumes beginning the last few days of February that significantly accelerated in March as a result of the COVID-19 impacts.
Total revenues of $10.3 billion missed the Zacks Consensus Estimate by 3.7% and also dipped 1% year over year. The top line was affected by weak spending volumes due to the COVID-19 impacts.
Total expenses of $7.2 billion decreased 5% year over year owing to a decline in operating costs.
Total provision of $2.6 billion skyrocketed 221% year over year as the company added $17 billion to its capital reserves in a bid to strengthen its balance sheet in the light of a significant deterioration in the global macroeconomic outlook as a result of the coronavirus adversity.
Segmental Update
American Express’ Global Consumer Services segment reported net income of $201 million, down 79% year over year. Total revenues, net of interest expenses of $6 billion, were up 4% year over year, reflecting higher net interest income and card fees, partially offset by lower Card Member spending.
Global Commercial Services’ net income of $38 million plunged 92% year over year. Total revenues, net of interest expenses, were flat year over year at $3.1 billion as increased net interest income and card fees were offset by softness in Card Member spending.
Global Merchant and Network Services’ net income dropped 27% year over year to $417 million in the reported quarter. Total revenues and net of interest expenses were down 10% year over year to $1.4 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -49.94% due to these changes.
VGM Scores
At this time, American Express has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, American Express has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is American Express (AXP) Up 8.3% Since Last Earnings Report?
A month has gone by since the last earnings report for American Express (AXP - Free Report) . Shares have added about 8.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is American Express due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
American Express Q1 Earnings Beat Estimates
American Express Co. delivered first-quarter 2020 earnings of $1.98 per share, beating the Zacks Consensus Estimate by 17.2%. However, the bottom line was down 1.5% year over year.
The quarter reflected softness in spending volumes beginning the last few days of February that significantly accelerated in March as a result of the COVID-19 impacts.
Total revenues of $10.3 billion missed the Zacks Consensus Estimate by 3.7% and also dipped 1% year over year. The top line was affected by weak spending volumes due to the COVID-19 impacts.
Total expenses of $7.2 billion decreased 5% year over year owing to a decline in operating costs.
Total provision of $2.6 billion skyrocketed 221% year over year as the company added $17 billion to its capital reserves in a bid to strengthen its balance sheet in the light of a significant deterioration in the global macroeconomic outlook as a result of the coronavirus adversity.
Segmental Update
American Express’ Global Consumer Services segment reported net income of $201 million, down 79% year over year. Total revenues, net of interest expenses of $6 billion, were up 4% year over year, reflecting higher net interest income and card fees, partially offset by lower Card Member spending.
Global Commercial Services’ net income of $38 million plunged 92% year over year. Total revenues, net of interest expenses, were flat year over year at $3.1 billion as increased net interest income and card fees were offset by softness in Card Member spending.
Global Merchant and Network Services’ net income dropped 27% year over year to $417 million in the reported quarter. Total revenues and net of interest expenses were down 10% year over year to $1.4 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -49.94% due to these changes.
VGM Scores
At this time, American Express has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, American Express has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.