Financial giant American Express Co (NYSE:AXP) could offset any concerns of a credit card interest rate cap with a strong fourth-quarter earnings report on Friday before market open.
• AXO stock is trading in a tight range. Where are AXO shares going?
Here are the earnings estimates, analyst estimates and key items to watch.
American Express Q4 Earnings Estimates
Analysts expect American Express to report fourth-quarter revenue of $18.88 billion, up from $17.18 billion in last year's fourth quarter, according to data from Benzinga Pro.
The company has beaten analyst estimates for revenue in three straight quarters and in five of the past 10 quarters overall.
Analysts expect American Express to report fourth-quarter earnings per share of $3.54, up from $3.04 in last year's fourth quarter.
The company has beaten analyst estimates for earnings per share in seven straight quarters and in nine of the past 10 quarters overall.
American Express Analyst Ratings and Price Targets
Several American Express analysts have raised their price targets on the company ahead of the fourth-quarter earnings report.
Here are some of the most recent analyst ratings on American Express stock and their price targets:
- JPMorgan: Maintained Neutral rating, raised price target from $360 to $385
- TD Cowen: Maintained Hold rating, raised price target from $350 to $375
- Barclays: Maintained Equal-Weight rating, raised price target from $355 to $367
Key Items to Watch in American Express Q4 Earnings
The report from American Express comes as President Donald Trump has proposed limiting the interest rates for credit card companies. The move could hurt American Express, but could also allow the company to further compete with the market share leaders, Mastercard and Visa.
The earnings report from American Express could have a big impact on several stocks and ETFs as a top company in the financial sector.
American Express is also the second largest stock holding of Berkshire Hathaway Inc (NYSE:BRK)(NYSE:BRK). Former Berkshire CEO Warren Buffett was a big believer in American Express and made the company one of the largest stock holdings in the conglomerate's investment portfolio.
Berkshire Hathaway owns around 22% of the company and the stock represents around 17.3% of the company's investment portfolio, trailing only Apple at 19.3%.
American Express could make financial ETFs like the State Street Financial Select Sector SPDR ETF (NYSE:XLF) volatile. The stock is the 10th largest holding at 2.53% of assets, while Berkshire Hathaway is the top holding at 11.4%, putting a bigger emphasis on the impact of American Express stock overall.
American Express also belongs to the Dow Jones Industrial Average. In the SPDR Dow Jones Industrial Average ETF (NYSE:DIA), American Express is the fifth-largest holding at 4.48% of assets.
While the company's results will be important to the stock, the more important factor for the stock and the ETFs that hold it could be the company's guidance. The company raised its full-year guidance after the third-quarter results.
The company reported strong Card Member spending, higher net interest income and growth in revolving loan balances in the third quarter. Analysts and investors will likely be looking for more of the same in Friday's report.
American Express Stock Price Action
American Express stock trades at $358.73 on Thursday versus a 52-week trading range of $220.43 to $387.49. American Express shares are up 13.5% over the last 52 weeks.
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