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American Express (AXP) Gains But Lags Market: What You Should Know

Zacks Equity Research

American Express (AXP) closed the most recent trading day at $105.62, moving +1.61% from the previous trading session. This move lagged the S&P 500's daily gain of 1.9%. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 1.75%.

Wall Street will be looking for positivity from AXP as it approaches its next earnings report date. In that report, analysts expect AXP to post earnings of $0.66 per share. This would mark a year-over-year decline of 68.12%. Our most recent consensus estimate is calling for quarterly revenue of $8.62 billion, down 20.43% from the year-ago period.

AXP's full-year Zacks Consensus Estimates are calling for earnings of $2.95 per share and revenue of $38.13 billion. These results would represent year-over-year changes of -64.02% and -12.47%, respectively.

Any recent changes to analyst estimates for AXP should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.03% lower. AXP currently has a Zacks Rank of #3 (Hold).

In terms of valuation, AXP is currently trading at a Forward P/E ratio of 35.2. This represents a premium compared to its industry's average Forward P/E of 15.2.

Meanwhile, AXP's PEG ratio is currently 3.37. 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. The Financial - Miscellaneous Services was holding an average PEG ratio of 2.71 at yesterday's closing price.

The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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