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Here's Why American Express (AXP) Fell More Than Broader Market

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In the latest market close, American Express (AXP - Free Report) reached $217.65, with a -1% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.95%. On the other hand, the Dow registered a loss of 1.09%, and the technology-centric Nasdaq decreased by 0.84%.

Shares of the credit card issuer and global payments company have depreciated by 1.26% over the course of the past month, outperforming the Finance sector's loss of 1.88% and lagging the S&P 500's gain of 1.78%.

The upcoming earnings release of American Express will be of great interest to investors. The company's earnings report is expected on April 19, 2024. The company's upcoming EPS is projected at $2.99, signifying a 24.58% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $15.75 billion, indicating a 10.27% increase compared to the same quarter of the previous year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.82 per share and a revenue of $66.21 billion, signifying shifts of +14.36% and +9.42%, respectively, from the last year.

Investors should also pay attention to any latest changes in analyst estimates for American Express. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.01% decrease. At present, American Express boasts a Zacks Rank of #3 (Hold).

Looking at valuation, American Express is presently trading at a Forward P/E ratio of 17.14. This denotes a premium relative to the industry's average Forward P/E of 10.54.

Investors should also note that AXP has a PEG ratio of 1.27 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Financial - Miscellaneous Services industry held an average PEG ratio of 0.97.

The Financial - Miscellaneous Services industry is part of the Finance sector. With its current Zacks Industry Rank of 149, this industry ranks in the bottom 41% of all industries, numbering over 250.

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.

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