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.
Is it Time to Buy Visa (V) & American Express (AXP) Stock?
Read MoreHide Full Article
Two of the more well-known consumer credit card companies have long been American Express (AXP - Free Report) ) and Visa (V - Free Report) ).
Investors may be wondering if these finance conglomerates can continue growing as inflationary concerns subside.
Let’s see if now is a good time to buy Visa or American Express stock for 2023 and beyond.
Performance Overview
American Express and Visa have continued to increase their relevance among financial services offered to consumers. American Express has evolved into a diversified financial services company that offers charge and credit payment card products along with travel-related services worldwide.
As for Visa, it operates as a payments technology company recognized globally for transaction processing services to institutions and merchant clients through its VisaNet platform. Visa’s branded payment products offer core business solutions, credit, debit, prepaid, and cash access programs for account holders.
Year to date, Visa stock is up roughly +1% to top American Expresses -13% with both trailing the S&P 500’s +7%. However, over the last five years, Visa’s +89% and American Expresses +72% have topped the benchmark.
Image Source: Zacks Investment Research
Valuation
Trading around $227 per share and 9% from its 52-week high, Visa stock has a forward P/E of 27.1X. In comparison, American Express stock is 15% off its highs at around $162 a share and trades at 14.5X forward earnings.
Image Source: Zacks Investment Research
American Expresses P/E valuation certainly stands out as it is below the S&P 500’s 19X but above the Financial-Miscellaneous Services industries 8.8X. Still, American Express is an industry leader and trades 43% below its decade high of 25.4X and on par with the median of 14.9X.
Visa stock trades above the benchmark’s P/E valuation and its Financial Transaction Services industry average of 15.4X. With that being said, Visa is also a leader in its space and trades 38% below its own decade-long high of 44.3X while also being on par with the median of 27.7X.
Outlook
Visa earnings are now expected to rise 12% in fiscal 2023 and jump another 13% in FY24 at $9.56 per share. Plus, earnings estimate revisions have gone up for both FY23 and FY24 throughout the quarter.
Sales are forecasted to be up 10% this year and rise another 10% in FY24 to $35.58 billion. More impressive, Fiscal 2024 would be a 55% increase from pre-pandemic levels with 2019 sales at $22.97 billion.
Image Source: Zacks Investment Research
Pivoting to American Express, earnings are projected to climb 14% this year and jump another 12% in FY24 at $12.67 per share. Even better, earnings estimates have continued to trend higher over the last 90 days.
On the top line, American Expresses sales are forecasted to soar 15% this year and rise another 8% in FY24 to $66.41 billion. Fiscal 2024 would represent 41% growth from pre-pandemic levels with 2019 sales at $47.02 billion.
Image Source: Zacks Investment Research
Bottom Line
Visa and American Express stock land a Zacks Rank #2 (Buy) at the moment. Both companies’ top and bottom line growth remains intriguing and makes them strong investments for 2023 and beyond.
On top of this, American Express and Visa trade attractively relative to their past from a price-to-earnings perspective with rising earnings estimates offering further support for more upside in their stocks.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is it Time to Buy Visa (V) & American Express (AXP) Stock?
Two of the more well-known consumer credit card companies have long been American Express (AXP - Free Report) ) and Visa (V - Free Report) ).
Investors may be wondering if these finance conglomerates can continue growing as inflationary concerns subside.
Let’s see if now is a good time to buy Visa or American Express stock for 2023 and beyond.
Performance Overview
American Express and Visa have continued to increase their relevance among financial services offered to consumers. American Express has evolved into a diversified financial services company that offers charge and credit payment card products along with travel-related services worldwide.
As for Visa, it operates as a payments technology company recognized globally for transaction processing services to institutions and merchant clients through its VisaNet platform. Visa’s branded payment products offer core business solutions, credit, debit, prepaid, and cash access programs for account holders.
Year to date, Visa stock is up roughly +1% to top American Expresses -13% with both trailing the S&P 500’s +7%. However, over the last five years, Visa’s +89% and American Expresses +72% have topped the benchmark.
Image Source: Zacks Investment Research
Valuation
Trading around $227 per share and 9% from its 52-week high, Visa stock has a forward P/E of 27.1X. In comparison, American Express stock is 15% off its highs at around $162 a share and trades at 14.5X forward earnings.
Image Source: Zacks Investment Research
American Expresses P/E valuation certainly stands out as it is below the S&P 500’s 19X but above the Financial-Miscellaneous Services industries 8.8X. Still, American Express is an industry leader and trades 43% below its decade high of 25.4X and on par with the median of 14.9X.
Visa stock trades above the benchmark’s P/E valuation and its Financial Transaction Services industry average of 15.4X. With that being said, Visa is also a leader in its space and trades 38% below its own decade-long high of 44.3X while also being on par with the median of 27.7X.
Outlook
Visa earnings are now expected to rise 12% in fiscal 2023 and jump another 13% in FY24 at $9.56 per share. Plus, earnings estimate revisions have gone up for both FY23 and FY24 throughout the quarter.
Sales are forecasted to be up 10% this year and rise another 10% in FY24 to $35.58 billion. More impressive, Fiscal 2024 would be a 55% increase from pre-pandemic levels with 2019 sales at $22.97 billion.
Image Source: Zacks Investment Research
Pivoting to American Express, earnings are projected to climb 14% this year and jump another 12% in FY24 at $12.67 per share. Even better, earnings estimates have continued to trend higher over the last 90 days.
On the top line, American Expresses sales are forecasted to soar 15% this year and rise another 8% in FY24 to $66.41 billion. Fiscal 2024 would represent 41% growth from pre-pandemic levels with 2019 sales at $47.02 billion.
Image Source: Zacks Investment Research
Bottom Line
Visa and American Express stock land a Zacks Rank #2 (Buy) at the moment. Both companies’ top and bottom line growth remains intriguing and makes them strong investments for 2023 and beyond.
On top of this, American Express and Visa trade attractively relative to their past from a price-to-earnings perspective with rising earnings estimates offering further support for more upside in their stocks.