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AmEx (AXP) Eyes Tie-Ups to Keep Up With the Digitization Trend

American Express Company AXP recently undertook a series of collaborations in a bid to solidify its digital capabilities as well as provide an efficient billing and payment process for small and medium-sized enterprises (SMEs).

American Express entered into two customer permissioned data sharing agreements with the data aggregation and analytics platform, Envestnet | Yodlee, and Plaid, the digital financial services provider.

The first partnership will witness the technical integration of the Envestnet | Yodlee platform with the Account Financials API of American Express, which remains in progress. As a result, AXP customers can avail the innovative financial solutions provided by Envestnet | Yodlee and utilize American Express account information to smartly manage their personal finances and expenses.

Meanwhile, the agreement with Plaid aims to establish a connection between AXP’s customers and the 8,000 plus connected apps and services of Plaid across the digital banking ecosystem. The integration of Plaid’s services with AXP’s Account Financials API is likely to commence in 2023.

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The underlying motive of both partnerships is to offer American Express customers a seamless access to digital financial tools. At the same time, the company intends to offer its customer base a secure and hassle-free data sharing of account information without the need to disclose confidential credential data with any other party besides AXP.

The twin collaborations, with the motive of enhancing digital prowess, are likely to bolster the customer base for American Express owing to the ongoing digitization trend followed in every sphere of life and the significant ease and benefits of the trend.

AXP has also conducted significant technology investments in the past to devise a solid digital suite for the benefit of its Card Members. It has also taken care of frauds that often come in handy with digital transactions, with effective fraud prevention services. The facility of a token generation that can be used as a substitute for an American Express card  when it is added to the digital wallet, easier monthly payments with AutoPay, the benefit of breaking up payments into equal monthly installments through Plan It and many more such benefits are results of the tech investments pursued by AXP.

A day before the partnerships with Envestnet | Yodlee and Plaid were announced, American Express teamed up with a fintech, Bluechain, for imparting the power of centrally managing, paying and reconciling supplier invoices by SME owners through a desktop or mobile. This seamless supplier payment process does not exhaust the time and resources of the business owners that they had to earlier expend on completing manual and time-consuming processes, such as data entry and bookkeeping.

Shares of American Express have gained 15.9% year to date, compared with the industry’s 5.1% growth. AXP currently carries a Zacks Rank #3 (Hold).

Zacks Investment Research
Zacks Investment Research


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Stocks to Consider

Some better-ranked stocks from the Finance space are Blackstone Secured Lending Fund BXSL, EastGroup Properties, Inc. EGP and Innovative Industrial Properties, Inc. IIPR. While Blackstone Secured Lending sports a Zacks Rank #1 (Strong Buy), EastGroup Properties and Innovative Industrial Properties carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Blackstone Secured Lending’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average surprise being 5.99%. The Zacks Consensus Estimate for BXSL’s 2023 earnings suggests an improvement of 29.9%, while the same for revenues suggests growth of 28.7% from the corresponding year-ago reported figures. The consensus mark for BXSL’s 2023 earnings has moved 1.6% north in the past 30 days.

The bottom line of EastGroup Properties outpaced estimates in three of the last four quarters and matched the mark once, the average surprise being 1.29%. The Zacks Consensus Estimate for EGP’s 2023 earnings suggests an improvement of 8%, while the same for revenues suggests growth of 13.7% from the corresponding year-ago reported figures. The consensus mark for EGP’s 2023 earnings has moved 0.4% north in the past 30 days.

Innovative Industrial Properties’ earnings outpaced estimates in each of the last four quarters, the average surprise being 6.96%. The Zacks Consensus Estimate for IIPR’s 2023 earnings suggests an improvement of 2.5%, while the same for revenues suggests growth of 6.3% from the corresponding year-ago reported figures. The consensus mark for IIPR’s 2023 earnings has moved 3.6% north in the past 30 days.

Shares of Blackstone Secured Lending and EastGroup Properties have rallied 16.9% and 15.9%, respectively, year to date. The Innovative Industrial Properties stock has, however, declined 29.8% in the same time frame.

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American Express Company (AXP) : Free Stock Analysis Report

EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report

Innovative Industrial Properties, Inc. (IIPR) : Free Stock Analysis Report

Blackstone Secured Lending Fund (BXSL) : Free Stock Analysis Report

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Zacks Investment Research