American Express (AXP) closed at $315.80 in the latest trading session, marking a -1.05% move from the prior day. This change lagged the S&P 500's 0.43% loss on the day. Elsewhere, the Dow lost 0.77%, while the tech-heavy Nasdaq lost 0.22%.
The credit card issuer and global payments company's shares have seen an increase of 2.42% over the last month, not keeping up with the Finance sector's gain of 2.86% and the S&P 500's gain of 2.65%.
The investment community will be paying close attention to the earnings performance of American Express in its upcoming release. On that day, American Express is projected to report earnings of $3.9 per share, which would represent year-over-year growth of 11.75%. Our most recent consensus estimate is calling for quarterly revenue of $17.99 billion, up 8.14% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15.26 per share and a revenue of $71.41 billion, indicating changes of +14.31% and +8.28%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for American Express. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.01% upward. American Express is currently sporting a Zacks Rank of #3 (Hold).
From a valuation perspective, American Express is currently exchanging hands at a Forward P/E ratio of 20.92. This expresses a premium compared to the average Forward P/E of 12.74 of its industry.
It's also important to note that AXP currently trades at a PEG ratio of 1.69. 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. Financial - Miscellaneous Services stocks are, on average, holding a PEG ratio of 0.98 based on yesterday's closing prices.
The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 38, putting it in the top 16% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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American Express Company (AXP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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