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American Express (AXP) Rises Yet Lags Behind Market: Some Facts Worth Knowing

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In the latest market close, American Express (AXP - Free Report) reached $221.69, with a +0.33% movement compared to the previous day. The stock's performance was behind the S&P 500's daily gain of 0.57%. At the same time, the Dow added 0.83%, and the tech-heavy Nasdaq gained 0.39%.

Shares of the credit card issuer and global payments company witnessed a gain of 3.96% over the previous month, beating the performance of the Finance sector with its gain of 2.81% and the S&P 500's gain of 2.97%.

The investment community will be closely monitoring the performance of American Express in its forthcoming earnings report. On that day, American Express is projected to report earnings of $3.01 per share, which would represent year-over-year growth of 25.42%. At the same time, our most recent consensus estimate is projecting a revenue of $15.75 billion, reflecting a 10.31% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $12.83 per share and a revenue of $66.21 billion, demonstrating changes of +14.45% and +9.4%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for American Express. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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.

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 shifted 0.02% upward. American Express is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, American Express currently has a Forward P/E ratio of 17.22. This indicates a premium in contrast to its industry's Forward P/E of 11.07.

One should further note that AXP currently holds a PEG ratio of 1.24. 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. As the market closed yesterday, the Financial - Miscellaneous Services industry was having an average PEG ratio of 0.98.

The Financial - Miscellaneous Services industry is part of the Finance sector. At present, this industry carries a Zacks Industry Rank of 141, placing it within the bottom 45% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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