In the latest close session, American Express (AXP) was up +2.52% at $335.32. The stock exceeded the S&P 500, which registered a loss of 0.54% for the day. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq lost 1.18%.
Heading into today, shares of the credit card issuer and global payments company had lost 8.38% over the past month, lagging the Finance sector's gain of 0.2% and the S&P 500's gain of 0.58%.
Market participants will be closely following the financial results of American Express in its upcoming release. The company is predicted to post an EPS of $3.97, indicating a 9.07% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $18.64 billion, indicating a 9.85% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates project earnings of $17.51 per share and a revenue of $78.76 billion, demonstrating changes of +13.85% and +9.04%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for American Express. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.08% higher within the past month. Right now, American Express possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, American Express is currently exchanging hands at a Forward P/E ratio of 18.68. This denotes a premium relative to the industry average Forward P/E of 11.17.
One should further note that AXP currently holds a PEG ratio of 1.38. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Financial - Miscellaneous Services industry stood at 0.89 at the close of the market yesterday.
The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 84, putting it in the top 35% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming 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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