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American Express (AXP) Stock Sinks As Market Gains: Here's Why

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The most recent trading session ended with American Express (AXP - Free Report) standing at $295.93, reflecting a -0.49% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.01% gain on the day. Meanwhile, the Dow experienced a drop of 0.22%, and the technology-dominated Nasdaq saw an increase of 0.32%.

The the stock of credit card issuer and global payments company has risen by 8% in the past month, leading the Finance sector's gain of 3.54% and the S&P 500's gain of 5.2%.

Investors will be eagerly watching for the performance of American Express in its upcoming earnings disclosure. The company's upcoming EPS is projected at $3.86, signifying a 10.6% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.69 billion, up 8.34% from the year-ago period.

AXP's full-year Zacks Consensus Estimates are calling for earnings of $15.19 per share and revenue of $71.27 billion. These results would represent year-over-year changes of +13.78% and +8.06%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for American Express. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.08% higher within the past month. Currently, American Express is carrying a Zacks Rank of #3 (Hold).

Investors should also note American Express's current valuation metrics, including its Forward P/E ratio of 19.58. This signifies a premium in comparison to the average Forward P/E of 10.36 for its industry.

One should further note that AXP currently holds a PEG ratio of 1.45. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Financial - Miscellaneous Services stocks are, on average, holding a PEG ratio of 0.94 based on yesterday's closing prices.

The Financial - Miscellaneous Services industry is part of the Finance sector. With its current Zacks Industry Rank of 138, this industry ranks in the bottom 44% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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