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American Express (AXP) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

American Express (AXP) closed the most recent trading day at $116.80, moving -0.84% from the previous trading session. This change lagged the S&P 500's 0.49% loss on the day. Elsewhere, the Dow lost 0.59%, while the tech-heavy Nasdaq lost 0.8%.

Prior to today's trading, shares of the credit card issuer and global payments company had lost 3.66% over the past month. This has lagged the Finance sector's gain of 4.31% and the S&P 500's gain of 3% in that time.

Investors will be hoping for strength from AXP as it approaches its next earnings release, which is expected to be October 18, 2019. The company is expected to report EPS of $2.08, up 10.64% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $10.99 billion, up 8.29% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.12 per share and revenue of $43.63 billion, which would represent changes of +10.78% and +8.16%, respectively, from the prior year.

Any recent changes to analyst estimates for AXP should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% lower. AXP is currently a Zacks Rank #3 (Hold).

Investors should also note AXP's current valuation metrics, including its Forward P/E ratio of 14.5. For comparison, its industry has an average Forward P/E of 11.61, which means AXP is trading at a premium to the group.

Investors should also note that AXP has a PEG ratio of 1.42 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AXP's industry had an average PEG ratio of 1.56 as of yesterday's close.

The Financial - Miscellaneous Services industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 144, which puts it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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