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American Express (AXP) Gains As Market Dips: What You Should Know

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American Express (AXP - Free Report) closed at $164.16 in the latest trading session, marking a +0.2% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.3%. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq added 0.2%.

Heading into today, shares of the credit card issuer and global payments company had gained 9.18% over the past month, outpacing the Finance sector's gain of 2.2% and the S&P 500's gain of 3.11% 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.55 per share and revenue of $41.67 billion, which would represent changes of +78.84% and +15.48%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for American Express. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.27% higher. American Express is currently a Zacks Rank #3 (Hold).

Looking at its valuation, American Express is holding a Forward P/E ratio of 17.16. Its industry sports an average Forward P/E of 12.13, so we one might conclude that American Express is trading at a premium comparatively.

It is also worth noting that AXP currently has a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Financial - Miscellaneous Services stocks are, on average, holding a PEG ratio of 0.88 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 102, putting it in the top 41% 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.

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