Investors are paying up for future growth expectations.
American Express stock (AXP) rose nearly 7% on Friday to reach a record high, as investors shrugged off a rare earnings miss. CEO Stephen Squeri told Yahoo Finance the miss was fueled by a one-time $100 million hit from the devaluation of the Argentine peso.
"I don't think anybody [on Wall Street] had the Argentine peso devaluation in there," Squeri noted.
Instead, investors are more inclined in the early going to give Amex a good grade for the resilience of its business inside a slowing economy — and how it may continue in 2024.
Amex saw fourth quarter sales at its US consumer services and commercial segments rise 13% and 7%, respectively. International sales jumped 12%.
The company issued 2024 earnings guidance well above the consensus.
"I think it's slowing down [the economy], and that's what's in our guidance, a slightly slower economy. Not a recession, but a slightly slower economy," Squeri explained. "We like our business model, and the reality is that we think that we will perform in a slower growth economy, in a regular steady state economy, and in a high growth economy — and I think we've shown that."
The earnings rundown
Net sales: +11% year over year to $15.8 billion vs. estimate of $15.99 billion
Credit Losses: +40% year over year to $1.44 billion vs. estimate for $1.39 billion
Diluted EPS: +27% year over year to $2.62 vs. estimate of $2.65
What else caught our attention: upbeat 2024 guidance
Net Sales: +9% to +11% (2023 growth rate: +14%)
Diluted EPS: $12.65 to $13.15 vs. estimate for $12.40
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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