American Express (AXP) earnings preview: solid double-digit growth

1:04 pm ET, 16 Jul 2018

American Express Company (AXP)  is expected to report earnings on July 18 after market close.  The report will be for the fiscal quarter ending June 2018.  Shares are trading at 100.50, down -0.64%.

What are AXP earnings expectations?  What news will the market be watching out for?  

The payment industry is changing as both merchants and issuers vie for control of rewards and loyalty. Over the past decade, merchants have won lower fees from payment processors, driving interchange fees down around the globe. Banks burned by losses produced by lending to subprime borrowers decided to target high-end customers and the fees they generate. 

Digital payments will increase the number of payment options available to customers, increasing competition for market share. Competitors seem willing to bid aggressively for business by offering ever-higher levels of rewards (as in the case of JPMorgan's Sapphire Reserve card) or rock-bottom pricing.

American Express' competitive advantages--a reputation for superior service, a network of attractive customers and merchants, and a corporate business with high switching costs--remain intact.  The closed-loop network's close ties to cardholders and merchants provide a solid base for the next phase in the company's history. There will be a huge opportunity to connect merchants with individual customers based on individual preferences and spending patterns, and that closed-loop networks provide the best opportunity to do this. 

American Express provided 15 million customers with information on local merchants in 2017. Industry experiments in this area are in the early stages, and successful efforts offer big growth opportunities. 

American Express Company has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 1 cent ($1.47 actuals vs. $1.46 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 3 cents ($1.50 actuals vs. $1.47 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 4 cents ($1.58 actuals vs. $1.54 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 15 cents ($1.86 actuals vs. $1.71 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 24% year-over-year to $1.83, while revenue is expected to grow 21% year-over-year to $10.01 billion.  

Over the last month, American Express Company (AXP) returned +0.48%. 

American Express Company (AXP) average analyst price target ($109.56) is 9.01% above its current price ($100.50).

For the latest price and information on American Express Company, please visit Finstead and search for "AXP price" or "AXP news".

Bank of America (BAC) earnings preview: expect revenue decline

4:24 am ET, 12 Jul 2018

Bank of America Corporation (BAC)  is expected to report earnings on July 16 before market open.  The report will be for the fiscal quarter ending June 2018.  Shares are trading at 28.83, down -0.76% from yesterday.

What are the BAC earnings expectations?  What news will the market be watching out for?  

Bank of America's strategy of simplification, efficiency, and risk reduction has slowly begun to pay off. Assets have remained fairly flat since 2009.  Management increased the bank's Tier 1 common ratio dramatically, closed nearly 25% of branches, and trimmed personnel dramatically. 

The bank's lending practices have also been revamped. Consumer loans are now made largely to customers with average FICO scores over 750, while the average American's score was 50 points lower.

Scale and scope advantages are increasingly important as the role of technology in banking grows. Bank of America generated noninterest income averaging just under 2% of total assets over the last three years, in line with JPMorgan Chase and not too far behind U.S. Bancorp and Wells Fargo, each averaging 2.2% of assets in fee income. Expenses are continuing to decline even as revenue grows.

The biggest risk to Bank of America's new, more conservative strategy is that its peers seem to be following the same playbook.  Competition for high-end credit card customers has increased, with firms like JPMorgan and American Express offering escalating perks and rewards for cardholders. Wells Fargo's long-standing emphasis on cross-selling multiple products produced exorbitant pressures on front-line employees and led to widespread fraud in the bank's branches. 

Bank of America Corporation, has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 3 cents ($.46 actuals vs. $.43 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 2 cents ($.48 actuals vs. $.46 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 3 cents ($.47 actuals vs. $.44 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 4 cents ($.62 actuals vs. $.58 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 24% year-over-year to $.57, while revenue is expected to decline 3% year-over-year to $22.48 billion.  


Over the last month, Bank of America Corporation (BAC) returned -3.93%.

Bank of America Corporation (BAC) average analyst price target ($34.56) is 19.88% above its current price ($28.83).

For the latest price and information on Bank of America Corporation, please visit Finstead and search for "BAC price" or "BAC news".

American Express Company (AXP) Stock Guide

Updated at: 11:54 am ET, 17 Sep 2020

Before we start: if you're looking for AXP stock price, you can quickly find it out by visiting Finny and typing "AXP quote". If you're looking for a quick scoop on AXP stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "AXP". You'll get all this info in one place. Or you can just type "AXP news" to get the latest stock news.

Looking to buy or sell American Express Company (AXP)? Interested in getting the full scoop on AXP, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this AXP stock guide, we'll address key questions about AXP, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are AXP earnings?
2. What is AXP dividend?
3. What is AXP dividend yield?
4. What is AXP stock forecast (i.e., prediction)?
5. AXP buy or sell? What is AXP Finny Score?
6. What are the reasons to buy AXP? Why should I buy AXP stock?
7. What are the reasons to sell AXP? Why should I sell AXP stock?
8. What are AXP key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are AXP earnings?

AXP trailing 12-month earnings per share (EPS) is $4.86.

2. What is AXP dividend?

AXP forward dividend is $1.72.

3. What is AXP dividend yield?

AXP forward dividend yield is 1.69%.

Analyst Predictions

4. What is AXP stock forecast (i.e., prediction)?

Based on AXP analyst price targets, AXP stock forecast is $104.72 (for a year from now). That means the average analyst price target for AXP stock is $104.72. The prediction is based on 28 analyst estimates.

The low price target for AXP is $80.00, while the high price target is $130.00.

AXP analyst rating is Hold.

Analysis

5. AXP buy or sell? What is AXP Finny Score?

#{finnyScore:67}Our quantitative analysis shows 4 reasons to buy and 2 reasons to sell AXP, resulting in Finny Score of 67.

6. What are the reasons to buy AXP? Why should I buy AXP stock?

Here are the reasons to buy AXP stock:

  • The data associated with American Express' affluent customers, and its direct connections to merchants, will enable the company to differentiate its rewards and maintain premium pricing for years to come.
  • American Express is allowing third parties to issue cards and acquire transactions, expanding the reach of its network.
  • American Express' reputation for superior customer service is a valuable intangible asset, and a substantial percentage of customers will not leave for a better deal.
  • AXP profitability is improving. The YoY profit margin change was 10.66 percentage points. See AXP profitability chart.
  • AXP forward dividend yield is 1.69%, higher than the industry (0.48%) and sector (1.11%) forward dividend yields. See AXP forward dividend chart.
  • AXP PEG ratio (P/E adjusted for growth) is 3.33, which is low compared to its industry peers’ PEG ratios. See AXP PEG chart.
  • AXP cash to debt ratio is 0.83, higher than the average industry (0.14) and sector (0.18) cash to debt ratio. See AXP cash to debt chart.

7. What are the reasons to sell AXP? Why should I sell AXP stock?

Let's look at the reasons to sell AXP stock (i.e., the bear case):

  • Mobile technology will alter the payment landscape in the biggest way since the advent of the credit card.
  • Competitors are making inroads into the premium space with ever more lucrative rewards offerings. As a monoline card issuer, American Express will have a hard time competing against diversified financial institutions.
  • Merchants are looking to take back control of rewards and loyalty programs from card issuers.
  • AXP quarterly revenue growth was -38.70%, lower than the industry and sector average revenue growth (1.72% and 1.27%, respectively). See AXP revenue growth chart.
  • AXP short interest (days to cover the shorts) ratio is 2.7. The stock garners more short interest than the average industry, sector or S&P 500 stock. See AXP short interest ratio chart.

Key Stats

8. What are AXP key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for AXP:

Metrics AXP
Price $97.77
Average Price Target / Upside $104.72 / 7.11%
Average Analyst Rating Hold
Forward Dividend Yield 1.69%
Industry Credit Services
Sector Financial Services
Number of Employees 59,000
Market Cap $82.5B
Forward P/E Ratio 15.34
Price/Book Ratio 2.41
Revenue (TTM) $34.26B
YoY Quarterly Revenue Growth -38.70%
Profit Margin 11.89%

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