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American Express (AXP) Gains But Lags Market: What You Should Know

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American Express (AXP - Free Report) closed the most recent trading day at $176.04, moving +1.88% from the previous trading session. This move lagged the S&P 500's daily gain of 2.14%. At the same time, the Dow added 1.82%, and the tech-heavy Nasdaq lost 0.01%.

Prior to today's trading, shares of the credit card issuer and global payments company had lost 10.17% over the past month. This has lagged the Finance sector's loss of 5.3% and the S&P 500's loss of 5.01% in that time.

Investors will be hoping for strength from American Express as it approaches its next earnings release. In that report, analysts expect American Express to post earnings of $2.41 per share. This would mark a year-over-year decline of 12.04%. Our most recent consensus estimate is calling for quarterly revenue of $11.64 billion, up 28.4% from the year-ago period.

AXP's full-year Zacks Consensus Estimates are calling for earnings of $9.72 per share and revenue of $50.01 billion. These results would represent year-over-year changes of -2.99% and +18.01%, respectively.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% higher. American Express is currently a Zacks Rank #3 (Hold).

Investors should also note American Express's current valuation metrics, including its Forward P/E ratio of 17.78. This valuation marks a premium compared to its industry's average Forward P/E of 10.55.

It is also worth noting that AXP currently has a PEG ratio of 1.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AXP's industry had an average PEG ratio of 0.73 as of yesterday's close.

The Financial - Miscellaneous Services industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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