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American Express (AXP) Stock Declines While Market Improves: Some Information for Investors

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American Express (AXP - Free Report) closed at $182.04 in the latest trading session, marking a -1.62% move from the prior day. This change lagged the S&P 500's 0.08% gain on the day. Meanwhile, the Dow lost 0.31%, and the Nasdaq, a tech-heavy index, added 0.02%.

The credit card issuer and global payments company's stock has climbed by 3.45% in the past month, exceeding the Finance sector's gain of 0.69% and lagging the S&P 500's gain of 3.52%.

The investment community will be paying close attention to the earnings performance of American Express in its upcoming release. The company is slated to reveal its earnings on January 26, 2024. The company's upcoming EPS is projected at $2.64, signifying a 27.54% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.03 billion, up 13.07% from the year-ago period.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for American Express. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.4% increase. American Express is currently a Zacks Rank #3 (Hold).

In terms of valuation, American Express is currently trading at a Forward P/E ratio of 14.86. Its industry sports an average Forward P/E of 10.31, so one might conclude that American Express is trading at a premium comparatively.

Also, we should mention that AXP has a PEG ratio of 1.05. 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. As the market closed yesterday, the Financial - Miscellaneous Services industry was having an average PEG ratio of 0.86.

The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 178, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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