American Express (AXP) Stock Sinks As Market Gains: What You Should Know
American Express (AXP) closed at $162.41 in the latest trading session, marking a -0.72% move from the prior day. This change lagged the S&P 500's daily gain of 0.57%. At the same time, the Dow added 0.43%, and the tech-heavy Nasdaq gained 0.33%.
Heading into today, shares of the credit card issuer and global payments company had lost 7% over the past month, lagging the Finance sector's loss of 6.53% and the S&P 500's gain of 1.72% in that time.
American Express will be looking to display strength as it nears its next earnings release, which is expected to be April 20, 2023. In that report, analysts expect American Express to post earnings of $2.66 per share. This would mark a year-over-year decline of 2.56%. Meanwhile, our latest consensus estimate is calling for revenue of $13.98 billion, up 19.15% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.25 per share and revenue of $61.11 billion. These totals would mark changes of +14.21% and +15.6%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for American Express. These revisions help to show the ever-changing nature 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. 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, 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 has moved 0.03% higher within the past month. American Express is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note American Express's current valuation metrics, including its Forward P/E ratio of 14.54. This valuation marks a premium compared to its industry's average Forward P/E of 9.29.
It is also worth noting that AXP currently has a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial - Miscellaneous Services was holding an average PEG ratio of 0.77 at yesterday's closing price.
The Financial - Miscellaneous Services industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 35% 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.
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