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American Express (AXP) to Post Q4 Earnings: What You Should Know
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American Express Company (AXP - Free Report) is set to report its fourth-quarter 2022 results on Jan 27, before the opening bell.
In the last reported quarter, the diversified financial services company’s adjusted earnings per share of $2.47 beat the Zacks Consensus Estimate by 2.1%, primarily due to continued business momentum and a solid revenue stream. American Express also benefited from better volumes and higher Card Member spending, due to a significant increase in Travel and Entertainment spending. However, the positives were partially offset by higher operating costs.
The Zacks Consensus Estimate of $2.18 per share for fourth-quarter earnings has witnessed no movement in the past week. The consensus mark is flat with the year-ago reported figure. American Express beat earnings estimates in all the trailing four quarters, delivering an average surprise of 11.3%. This is depicted in the graph below.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $14.3 billion, suggesting a jump of 17.3% from the year-ago reported figure. We expect fourth-quarter revenues to witness a 13.2% year-over-year increase.
Factors to Note
AmEx is likely to have witnessed improved volumes in the to-be-reported quarter, a trend seen over the last few quarters. It might have expanded, owing to total network volumes and billed business volumes. A rise in the overall spending level is likely to have boosted Discount revenues, AXP’s largest revenue driver.
The Zacks Consensus Estimate for fourth-quarter Discount revenues indicates 17.3% year-over-year growth. Our estimate suggests an 11.4% year-over-year increase in Discount revenues for the quarter under review.
Travel and Entertainment (T&E) is rapidly increasing in most parts of the world, overcoming the COVID-19 woes. T&E-related spending is expected to have increased in the fourth quarter of 2022. Fees, commissions and other revenues are likely to have improved on the back of an uptick in travel-related revenues. Card acquisitions in some of AXP’s largest travel co-brand portfolios are likely to have increased.
Cards-in-force is expected to have witnessed an uptick in the quarter under review. Both the consensus mark and our estimate for total cards-in-force indicate a 10% year-over-year increase.
American Express’s net interest income, the second-largest revenue contributor, is likely to have risen on higher loan disbursements. The consensus mark for AXP’s net interest income suggests an upside of 28.3% from the year-ago reported figure. We expect the figure to increase 23.6% from the year-ago period. Further, the Zacks Consensus Estimate for Global Merchant and Network Services’ pre-tax income indicates a 55.4% year-over-year increase while our estimate suggests a 49.7% year-over-year surge.
The above-mentioned factors are likely to have contributed to AXP’s fourth-quarter performance. However, the rising expenses in global commercial services, card member rewards, marketing and business development are expected to have partially offset the profits. Our estimate suggests total expense increase of 17.3% year over year in the quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for American Express this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -4.28%. This is because the Most Accurate Estimate currently stands at $2.09 per share, much lower than the Zacks Consensus Estimate of $2.18.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Express currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for American Express, here are some companies from the broader finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Axos Financial’s bottom line for the to-be-reported quarter is pegged at $1.24 per share, implying a 19.2% improvement from the year-ago figure. AX beat earnings estimates in each of the past four quarters, with an average surprise of 6.6%.
Aon plc (AON - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank of 2.
The Zacks Consensus Estimate for AON’s bottom line for the to-be-reported quarter is pegged at $3.67 per share, which witnessed two upward estimate revisions in the past 30 days against one downward movement. AON beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 2.8%.
The Hartford Financial Services Group, Inc. (HIG - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Hartford Financial’s bottom line for the to-be-reported quarter is pegged at $1.86 per share, which improved 1.1% in the past 60 days. AXP beat earnings estimates in each of the past four quarters, with an average surprise of 23.1%.
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American Express (AXP) to Post Q4 Earnings: What You Should Know
American Express Company (AXP - Free Report) is set to report its fourth-quarter 2022 results on Jan 27, before the opening bell.
In the last reported quarter, the diversified financial services company’s adjusted earnings per share of $2.47 beat the Zacks Consensus Estimate by 2.1%, primarily due to continued business momentum and a solid revenue stream. American Express also benefited from better volumes and higher Card Member spending, due to a significant increase in Travel and Entertainment spending. However, the positives were partially offset by higher operating costs.
Let’s see how things have shaped up before the fourth-quarter earnings announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate of $2.18 per share for fourth-quarter earnings has witnessed no movement in the past week. The consensus mark is flat with the year-ago reported figure. American Express beat earnings estimates in all the trailing four quarters, delivering an average surprise of 11.3%. This is depicted in the graph below.
American Express Company Price and EPS Surprise
American Express Company price-eps-surprise | American Express Company Quote
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $14.3 billion, suggesting a jump of 17.3% from the year-ago reported figure. We expect fourth-quarter revenues to witness a 13.2% year-over-year increase.
Factors to Note
AmEx is likely to have witnessed improved volumes in the to-be-reported quarter, a trend seen over the last few quarters. It might have expanded, owing to total network volumes and billed business volumes. A rise in the overall spending level is likely to have boosted Discount revenues, AXP’s largest revenue driver.
The Zacks Consensus Estimate for fourth-quarter Discount revenues indicates 17.3% year-over-year growth. Our estimate suggests an 11.4% year-over-year increase in Discount revenues for the quarter under review.
Travel and Entertainment (T&E) is rapidly increasing in most parts of the world, overcoming the COVID-19 woes. T&E-related spending is expected to have increased in the fourth quarter of 2022. Fees, commissions and other revenues are likely to have improved on the back of an uptick in travel-related revenues. Card acquisitions in some of AXP’s largest travel co-brand portfolios are likely to have increased.
Cards-in-force is expected to have witnessed an uptick in the quarter under review. Both the consensus mark and our estimate for total cards-in-force indicate a 10% year-over-year increase.
American Express’s net interest income, the second-largest revenue contributor, is likely to have risen on higher loan disbursements. The consensus mark for AXP’s net interest income suggests an upside of 28.3% from the year-ago reported figure. We expect the figure to increase 23.6% from the year-ago period. Further, the Zacks Consensus Estimate for Global Merchant and Network Services’ pre-tax income indicates a 55.4% year-over-year increase while our estimate suggests a 49.7% year-over-year surge.
The above-mentioned factors are likely to have contributed to AXP’s fourth-quarter performance. However, the rising expenses in global commercial services, card member rewards, marketing and business development are expected to have partially offset the profits. Our estimate suggests total expense increase of 17.3% year over year in the quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for American Express this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -4.28%. This is because the Most Accurate Estimate currently stands at $2.09 per share, much lower than the Zacks Consensus Estimate of $2.18.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Express currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for American Express, here are some companies from the broader finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Axos Financial, Inc. (AX - Free Report) has an Earnings ESP of +0.16% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Axos Financial’s bottom line for the to-be-reported quarter is pegged at $1.24 per share, implying a 19.2% improvement from the year-ago figure. AX beat earnings estimates in each of the past four quarters, with an average surprise of 6.6%.
Aon plc (AON - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank of 2.
The Zacks Consensus Estimate for AON’s bottom line for the to-be-reported quarter is pegged at $3.67 per share, which witnessed two upward estimate revisions in the past 30 days against one downward movement. AON beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 2.8%.
The Hartford Financial Services Group, Inc. (HIG - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Hartford Financial’s bottom line for the to-be-reported quarter is pegged at $1.86 per share, which improved 1.1% in the past 60 days. AXP beat earnings estimates in each of the past four quarters, with an average surprise of 23.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.