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American Express (AXP) Outpaces Stock Market Gains: What You Should Know

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American Express (AXP - Free Report) closed at $164.19 in the latest trading session, marking a +1.06% move from the prior day. This change outpaced the S&P 500's 0.62% gain on the day. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.03%.

Heading into today, shares of the credit card issuer and global payments company had lost 4.32% over the past month, lagging the Finance sector's loss of 1.47% and the S&P 500's gain of 0.87% in that time.

Investors will be hoping for strength from American Express as it approaches its next earnings release, which is expected to be January 25, 2022. On that day, American Express is projected to report earnings of $1.77 per share, which would represent year-over-year growth of 0.57%. Meanwhile, our latest consensus estimate is calling for revenue of $11.42 billion, up 22.14% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.55 per share and revenue of $41.67 billion. These totals would mark changes of +78.84% and +15.48%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for American Express. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.27% higher within the past month. American Express is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, American Express is currently trading at a Forward P/E ratio of 17.19. Its industry sports an average Forward P/E of 12.01, so we one might conclude that American Express is trading at a premium comparatively.

Investors should also note that AXP has a PEG ratio of 0.86 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Financial - Miscellaneous Services stocks are, on average, holding a PEG ratio of 0.86 based on yesterday's closing prices.

The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 91, putting it in the top 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AXP in the coming trading sessions, be sure to utilize Zacks.com.


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