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

The latest trading session saw American Express (AXP) ending at $237.25, denoting a -0.39% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily gain of 0.03%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq gained 0.59%.

Shares of the credit card issuer and global payments company have depreciated by 0.31% over the course of the past month, underperforming the Finance sector's gain of 2.95% and the S&P 500's gain of 4.19%.

Analysts and investors alike will be keeping a close eye on the performance of American Express in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $3.23, marking a 11.76% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $16.6 billion, indicating a 10.25% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $13.01 per share and a revenue of $66.44 billion, representing changes of +16.06% and +9.8%, respectively, from the prior year.

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Any recent changes to analyst estimates for American Express should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 18.31. Its industry sports an average Forward P/E of 10.52, so one might conclude that American Express is trading at a premium comparatively.

One should further note that AXP currently holds a PEG ratio of 1.35. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Financial - Miscellaneous Services industry was having an average PEG ratio of 0.91.

The Financial - Miscellaneous Services industry is part of the Finance sector. This industry, currently bearing a Zacks Industry Rank of 83, finds itself in the top 33% echelons 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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American Express Company (AXP) : Free Stock Analysis Report

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Zacks Investment Research