American Express (AXP) closed at $287.79 in the latest trading session, marking a -3.42% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 1.13%. Meanwhile, the Dow experienced a drop of 1.79%, and the technology-dominated Nasdaq saw a decrease of 1.3%.
The credit card issuer and global payments company's shares have seen a decrease of 0.52% over the last month, not keeping up with the Finance sector's gain of 1.24% and the S&P 500's gain of 3.55%.
The investment community will be paying close attention to the earnings performance of American Express in its upcoming release. The company is expected to report EPS of $3.86, up 10.6% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $17.69 billion, reflecting a 8.34% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $15.2 per share and a revenue of $71.27 billion, representing changes of +13.86% and +8.06%, respectively, from the prior 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. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.14% upward. Currently, American Express is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, American Express is currently trading at a Forward P/E ratio of 19.6. For comparison, its industry has an average Forward P/E of 11.21, which means American Express is trading at a premium to the group.
It's also important to note that AXP currently trades at a PEG ratio of 1.45. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Financial - Miscellaneous Services industry currently had an average PEG ratio of 0.98 as of yesterday's close.
The Financial - Miscellaneous Services industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 137, positioning it in the bottom 45% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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