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American Express (AXP) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

American Express (AXP) closed at $99.05 in the latest trading session, marking a -0.28% move from the prior day. This move lagged the S&P 500's daily gain of 0.36%. At the same time, the Dow lost 0.21%, and the tech-heavy Nasdaq gained 0.76%.

Coming into today, shares of the credit card issuer and global payments company had gained 3.7% in the past month. In that same time, the Finance sector gained 3.63%, while the S&P 500 gained 6.9%.

AXP will be looking to display strength as it nears its next earnings release. On that day, AXP is projected to report earnings of $1.27 per share, which would represent a year-over-year decline of 38.94%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.80 billion, down 19.9% from the year-ago period.

AXP's full-year Zacks Consensus Estimates are calling for earnings of $3.20 per share and revenue of $36.39 billion. These results would represent year-over-year changes of -60.98% and -16.45%, respectively.

Investors should also note any recent changes to analyst estimates for AXP. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 4.12% higher. AXP is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that AXP has a Forward P/E ratio of 31.05 right now. This represents a premium compared to its industry's average Forward P/E of 17.65.

Meanwhile, AXP's PEG ratio is currently 3.48. 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 industry currently had an average PEG ratio of 3.38 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 207, which puts it in the bottom 19% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Zacks Investment Research