American Express (AXP) Rises 10% in 6 Months: More Room to Run?
Shares of American Express Company AXP have gained 10.3% in the past six months against the industry’s 2.7% decline. The Finance sector and the S&P 500 composite index fell 2.4% and 4%, respectively, in the same time frame. With a market capitalization of $132.4 billion, the average volume of shares traded in the last three months was 3.2 million.
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Improved consumer spending, innovative card offerings and digital solutions suite, acquisitions and a solid financial position continue to drive American Express.
The leading globally integrated payments company with a current Zacks Rank #3 (Hold) has a decent earnings surprise history. It outpaced earnings in three of the trailing four quarters and missed the same once, the average surprise being 4.45%.
Can AXP Retain the Momentum?
The Zacks Consensus Estimate for American Express’ 2023 earnings is pegged at $11.20 per share, indicating a 13.7% increase from the year-ago reported figure. The same for revenues stands at $61.1 billion, implying 15.6% growth from the prior-year number.
Revenues of American Express continue to benefit on the back of growing discount revenues that account for a significant portion of the overall top line. Rising consumer spending as a result of the receding of COVID--induced volatilities provides an impetus to AXP’s revenues in the days ahead. Increased confidence of people in traveling should drive its service fees and other revenues.
For 2023, American Express anticipates revenue growth to witness year-over-year improvement within 15-17%. Double-digit revenue growth is expected to be achieved in the long haul.
AXP actively pursues a strategy of boosting its presence in the premium consumer space through extending membership benefits best suited to the daily expenditure, borrowing, travel and lifestyle needs of consumers. It also takes the help of acquisitions and partnerships to bolster capabilities and widen its global presence.
American Express pursues investments required for new product launches and the upgradation of existing ones. These initiatives are integral to keeping Card Member retention at a high level. In order to keep pace with the ongoing digital trend, AXP has also enhanced digital solutions and services in place. To counter the growing cybercrimes which is simultaneous with the widespread adoption of digital means, American Express has also devised effective fraud prevention services.
A cash balance, which is sufficient to service short-term debt obligations, substantiates the sound liquidity position of AXP. It has robust cash-generating abilities through which it can pursue significant business investments and tactical capital-deployment moves via share buybacks and dividends. Management plans to increase its quarterly dividend by 15% in the first quarter of 2023.
American Express boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Stocks to Consider
Some top-ranked stocks in the Finance space are Ameriprise Financial, Inc. AMP, Civista Bancshares, Inc. CIVB and Enterprise Financial Services Corp EFSC. While Ameriprise Financial sports a Zacks Rank #1 (Strong Buy), Civista Bancshares and Enterprise Financial Services carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ameriprise Financial’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.50%. The Zacks Consensus Estimate for AMP’s 2023 earnings suggests an improvement of 22.1%, while the same for revenues suggests growth of 7% from the corresponding year-ago reported figures. The consensus mark for AMP’s 2023 earnings has moved 4.5% north in the past 30 days.
The bottom line of Civista Bancshares beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 5.24%. The Zacks Consensus Estimate for CIVB’s 2023 earnings suggests an improvement of 22.7%, while the same for revenues suggests growth of 20.1% from the corresponding year-ago reported figures. The consensus mark for CIVB’s 2023 earnings has moved 2.2% north in the past 30 days.
Enterprise Financial Services’ earnings outpaced estimates in each of the last four quarters, the average surprise being 10.13%. The Zacks Consensus Estimate for EFSC’s 2023 earnings suggests an improvement of 7.2%, while the same for revenues suggests growth of 18.1% from the corresponding year-ago reported figures. The consensus mark for EFSC’s 2023 earnings has moved 2.2% north in the past 30 days.
Shares of Ameriprise Financial and Enterprise Financial Services have gained 22.8% and 15.7%, respectively, in the past six months. However, the Civista Bancshares stock has lost 1.7% in the same time frame.
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American Express Company (AXP) : Free Stock Analysis Report
Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
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